1) Accessing Conversion File
Go to your Slave Folder and edit index.php

//Find this Code and change

exec(FFMPEG . " -i ".$root.$filesdir.$storage_filename." -ar 44100 ".$root.$filesdir.$storage_filename.".flv");

//and Replace it with this

exec(FFMPEG . " -i ".$root.$filesdir.$storage_filename." -s 480x360 -b 750k -ar 44100 ".$root.$filesdir.$storage_filename.".flv");

Where -b = The Bitrate of the Video
750k is just a good template the produces fair quality video for good size ratio, how high you would like the quality is up to you.
i.e 2000k is very good quality, but produces big file sizes
200k is poor quality but produces small File sizes

Where -s = the Size of the Video
Videos are encoded at all sorts of resolutions, so here you can choose a figure that you would like the videos to be encoded at.

Much more FFMPEG encoding Guides and options are available at
http://howto-pages.org/ffmpeg/
http://www.penguin-soft.com/penguin/man/1/ffmpeg.html