Let us know how you go PLEASE.
I too have had no end of dramas with FCE.
Thankfully the guy has seen the light and bought Vegas except now I've lost plausable deniability. What was I thinking :(
A few years ago it became apparent to me that Sony took a back seat approach to Quicktime implementation and .mov files in general. So I invested in Sorenson Squeeze. It works very well. Sorenson 3 is not a codec to scoff at. Not when done by Squeeze. It will produce a quality video file of an incredibly small size. Perfect for sending over the web to someone. Just don't use Vegas to create it.
I have Squeeze 6, and find it to output the best-looking video with a clear difference for many formats, and the user interface is fabulous. A bit pricey though for those who aren't upgrading (I started with V4, thank God).
But Sorenson 3? That codec was optimized for low bit rates 10 years ago, and I can't see any reason to use it today (it was actually based on en early draft of h.264). Why not just use h.264? The implementation in Squeeze 6 especially is stunning.
I have Squeeze 4.5. They have an upgrade for $299 right now to version 6. I also have the VP6 plugin that works very well.
If you need a really small file size I don't know of anything that will produce comparable quality to SVQ3. I am talking about a file that is only a couple of MB.