You'll want to create a new comp that's the size and frame rate you want for your web video. Then Drag your full sized comp into the new one and scale it to fit. Make sure that the X and Y scale values are equal. You may also want to do some cropping here. If you then need a little sharpening you can do it here by using an unsharp mask. Now render your new comp.
I almost forgot to mention that if your video footage is interlaced you have to make sure that you've separated fields. You can't move or scale interlaced video without significantly softening the image.
I have just tried this and it's all going well except the sound isn't travelling with the pictures. I drag and drop my composition but it leaves the sound behind. Any ideas?
Be sure to check the "audio" in your output module, it's unchecked by default, so it's easy to miss that one .