Steve,
are you editing on Premiere Pro? If so I believe it should be possible for you to get good quality, even if you compress it to the required format/size!

It's very much about tweaking the settings, eg. bitrate is important.

We could open a new thread, which could be called: "Compression tips & tricks - how to tweak settings for best quality vs. size". Then everybody could post their secrets.
Give me a couple of more days, as I'm in the middle of finishing the uwol13 entry. Than I will write some of my findings.