The wiki also says that if you set it to MP2, you must also set the bit rate, which you didn't do. And of course, the bit rate is what determines the file size, not the codec per se. The question is, does MP2 really sound better at a low bit rate than AC3? Or is there some other reason (lower encoding overhead? simple inertia?) why an AC3-capable device like the S2 uses MP2 for its own recordings? The size savings is kind of moot anyway, since video is by far the bulkier part of the stream.