There are people who are professional compressionists, it's all they do. And from them I've learned a great deal over the years. To start with, I'll recommend the book "Apple Pro Training Series: Compressor 3.5". All the information applies to Compressor 4. But here's some information to help you along.
Compression is a balance between speed and quality. You can't have both, you sacrifice one for the other. Faster encodes, lower quality. Higher quality, slower encodes.
As for file sizes, the truth is that what you refer to as huge file sizes are actually normal file sizes. Long-GOP file formats such as MPEG-2, MPEG-4, H.264, HDV, XDCAM, AVCHD, etc, are all very highly compressed. They are smaller than normal file sizes and were originally developed as web delivery formats, and later adopted as low cost consumer/prosumer acquisition formats.
Formats such as DVCPRO-HD, ProRes, NTSC, are all full resolution, full frame size, full data for each frame, minimally compressed "normal" file sizes.
Uncompressed is what we professionally consider "larger than normal" file sizes.
It's a fact of life. H.264 off your DSLR is a TINY file, VERY compressed, and does not contain 100% of the data for each and every frame of video. It's very taxing on your CPU, as edits can only be done on I-Frames, which means the GOP structure has to be reformulated for each edit in the background, playback requires 8-12 frames of data to be read for each single frame to be reconstructed, output takes much longer, etc, etc, etc, which is why it sucks on any NLE to edit with. And every NLE uses a background proxie to edit it with (even those claiming to do it natively, the industries dirty little secret). And most importantly, if you pile effects on these file formats, transcode more than once or twice, try to color correct them, they start to fall apart in ability to manipulate and maintain image quality, FAST. ProRes was made to hold your image quality over dozens of transcodes, tons of image processing, etc. DVCPRO-HD holds up in this way, also.
As for MPEG Streamclip, I have found it to be somewhat unstable, wonky, but it's a useful tool seeing as how it is free. The big question is, are you making a living at this, or doing it on your own?
If you're making a living, you figure in the price of additional Compressor plugins or something like Episode and Cinematize, then pass that cost on to your clients.
If you're doing it for free, you use Handbreak and MPEG Streamclip for free and work with their quirks. You may also want to look in to FFmpegX, which is free, takes some doing to get it fully installed and functioning, but is well worth the efforts.
Faster CPUs mean faster encodes, there's not much else you can do about it. Welcome to the art and science of compression.