I keep seeing this question on here so I'm posting my favorite article on this subject written by someone at DVXuser, I feel this article and the links within should answer every question you have about posting a video on youtube, your own site and all other compression issues. Enjoy and I recommend you bookmark it like I have! ;)
http://cinebasics.tumblr.com/Encoding%20Made%20easy
Good article Cinebasics, I
Good article Cinebasics, I wish I would have read this about a year ago.