What is the optimal codec and encoding parameters to encode Video Podcast?
I would recommend the h264 codec as it produces reasonable quality at small size and it provides broad compatibility.

The open source encoder x264 is considered as the best one out there.
I can't recommend any command line parameters but there are several good programs that make use of the x264 encoder.
I like Vidcoder which is a fork of the popular Handbrake software.
You will see that even with the default settings you achieve a much smaller video size at comparable quality.