(sorry for spelling and grammatical mistakes below
I've tried to do what you are doing. My FOX affiliate here plays 2 episodes daily, so I fiddled with my tv-tuner and started capturing episodes, i'm captured off of an antenna, not cable, so the quality was a little off, which led me to eventually stop doing it. But enough about me...
Generally, you want to capture the video at the highest quality that you can. Capture at the highest resolution and framerate that you can without getting too many dropped frames (there should be an indicator someplace when you are capturing, depending on what software you are using [BTW, I strongly recommend VirtualVCR (http://virtualvcr.sourceforge.net). If you do use it, you may want to use it in conjunction with VVCR Scheduler (http://www.zisoft.de/video/)]). Avoid compressing the video and audio when capturing, because that will lead to dropped frames, and thus poor quality.
After it is captured, you can use a simple video editing program (I recommend VirtualDub [http://www.virtualdub.org]) to resize the video (if you see fit), and most importantly you can encode the audio and video, to a size that you'd like (around 175mb).
I recommend MP3 and Divx5 when encoding (for audio and video, respectively)
A quick lesson on bitrates: Work backwards.
If you want the result file to be 175 mb...I always alot 25% of the size for audio and 75% for video (personal preference, you can experiment). So 25% of 175mb is about 43 mb. Which means all the audio in the episode should come out to be 43mb. If we divide 44032KB (the same as 43MB, 43MB x 1024 [because there are 1024 kilobytes in a megabyte]) by 1320 (22 minutes x 60 seconds [the total number of seconds in an episode]), it comes out to about 33KB per second. Not done yet! Multiply 33 by 8 to turn it from kilobytes into kilobits (8 bits in a byte) and you get a bitrate for the audio of 264. (That's kinda high...CD quality is only 128 kbps...as I said, experiment). Do the same thing for the video and then start encoding.
P = percent of file size (75% is .75)
M = total file size
S = length of video (in seconds)
Bitrate = (P*M*8192) / S
You can also use a great program called "GSpot Codec Information Appliance" (hehe) which reads an AVI file and tells you what framerate, resolution, codecs, bitrates it uses. It's very useful.
Check out http://www.doom9.net, they have tutorials about virtually anything you might want to do with audio/video.
Wow...long post. Email me with any questions you have, or IM me