What operating system are you using? If it is XP or ME, Windows Movie Maker might be able to convert this file into a .wmv file and give you the option of how much you would want to compress it. I say
might because I haven't used it to work on a file that size.
I use Pinnacle Studio 9 to work on home movies and those files (1 hour of raw and uncompressed digital video) are upwards of 15 gigs each so it sounds like you've got about 1 hour of an .avi or .mpeg file. Pinnacle (not free) lets me compress that 15 gig file down to 4.7 gigs to get it onto a dvd or (I presume since there is a vcd option) even to 700 to get it onto a compact disc.
There has to be a free video compression/editing program out there that will allow you to compress your file down to at least 700 megs or so and maintain very good quality given the number of ripped vcd's that are floating around on torrents. You also should be able to compress it even further for straight web viewing (ie. you don't need the same quality to view it on a 17" computer monitor as you do on a 32" tv). I'm sorry that I can't help anymore except to say I don't know how but there are ways to do this.
Can anyone help?
EDIT: I did a quick search on free video editing programs and this looks like it might be of use to you:
http://www.zs4.net/features