You can create an SVCD to get better resolution. VCD gives 352x288 resolution while SVCD gives 480 x 576 on PAL.
Excerpt from
http://www.videohelp.com/svcd.php
SVCD stands for "Super VideoCD". A SVCD is very similiar to a VCD, it has the capacity to hold about 35-60 minutes on 74/80 min CDs of very good quality full-motion video along with up to 2 stereo audio tracks and also 4 selectable subtitles. A SVCD can be played on many standalone DVD Players and of course on all computers with a DVD-ROM or CD-ROM drive with the help of a software based decoder / player. It is also possible to use menus and chapters, similiar to DVDs, on a SVCD and also simple photo album/slide shows with background audio. The quality of a SVCD is much better than a VCD, especially much more sharpen picture than a VCD because of the higher resolution.
If you are creating movies to be viewed on computers only and not on VCD players, you can use DivX or other such MPEG4 codecs that produce good compression on videos... Then, u can burn them on cds and even add a menu to view them (If you use a freeware called Deep burner, you can create a CD with menu options to play the movie (one or more) using default media player, install the needed codecs, and even install your choice media player).
Hope this helps,
Arun