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I would recommend bringing reducing the frame size. That will greatly reduce the size of the file -- and it's pretty likely the site you post it to is going to do so anyway.
A full sized video frame for TV is essentially 640x480 pixels (The pixels are non-square 720x480, but all in it's essentially 640x480.)
The standard for video for the web is 320x240, and doing that alone should make a significantly smaller video file.
Meantime, if you're using versions 4 or 7 of Premiere Elements, there are some easier ways for exporting an MPEG4. (I assume you used File/Export/Movie, which will work also although, as you've found, takes some digging to find the right settings.)
I do have PE4. I found the share function and was able to make a WMV file with the 320 X 240 dimensions. I lowered the quality a bit and ended up with a file which I could email. Unfortunately, it doesn't seem as easy to make an MPEG4 using share. In any event, I think I got it now.
Look under the Share option to output to a phone or portable device -- in particular, under the iPod. Use the Medium Quality preset from the dropdown and it should produce a nice, compact MPEG4.