Hi,
Yes Windows Media format is very efficient but unfortunately proprietary to windows.
The thing to understand is that mojoPortal is not involved in processing video requests. All mojoportal does is deliver html to the web browser and that html may have links to video or javascript video players that link to video. When a user clicks the link it is the web server (ie IIS) that delivers the video file or stream without any processing or influence from mojoPortal. We do provide some ways to upload the files but we don't limit that either in terms of file size it is all done by configuration in terms of what IIS will allow.
Beyond configuration the limits are whatever the machine and bandwidth are able to handle.
Video files are large and serving a lot of large files to a lot of simultaneous users adds up quickly to a heavy load.
Whenever possible I recommend off load the serving of the video to the infrastructure of free services such as youtube and just embed the youtube video in the web page so it plays on your site pages like I did on this page for example.
When you upload a video to youtube they convert it to a variety of formats to support different devices and different levels of bandwidth. For youtube you should upload the highest quality file you can create and not worry too much about compression to make the file smaller as that also can degrade the quality. Let them worry about compressing it and optimizing it.
For self hosted video files it definitely makes a difference about the tools used, some encoding tools do work better than others as far as compressing the video and audio.
Hope that helps,
Joe