I use Video Watermark Factory. I added a text watermark to a 2.8 Mb clip. I hit generate. The new file was 381 Mb. How do I make it within youtube limits.
I dont use that software , but you can easily do it in flash or softwares like camtasia without any increment in the size..
I think you used the 'Lossles AVI' settings while saving the clip.. I haven't used that software either.. But, try to find option like 'Codec options' or 'Video Compression' or 'Video Settings' .. Something like that.. There, lower the bit-rate manually, or choose different profile like DivX video or Xvid video .. BTW, have u tried Virtual Dub ? It's free, powerful and it's easy to find support for it as it's most widely used.. www.virtualdub.org
how is the video being delivered? instead of placing the watermark on every video file itself, why not play the video in a flash player that places a watermark over the video as it loads in the browser?
This happens to me also in Vegas, I just mess around with the output settings and it eventually worked out fine