I have done as you told with same file which I have uploaded.
I have just added empty Text one line to show the name of my daugher. I just told as you say and render the movie as AVI
Now the file size from 17 mb to become 622 MB?
what to do?

and Custom->Microsoft Video-1>Size is 56 MB. Origianl size is about 17 mb.
Quality is very bad.

It's all about the bitrate. The file size is completely determined by the duration and the bitrate. What bitrate did you use when rendering? Obviously a much higher bitrate than the camera used when encoding the file.

What rendering format, file type, template, and custom settings did you use?

A small original Movie I have taken from Nikon is here
http://cid-ce583d1094a511ea.skydrive.live.com/self.aspx/Public/movie%20001.zip

its about 17 MB, I just want to add text Media to put my daugher's name and as I was suggested in the previous post I kept as Original format. Renders as AVI uncompress it came 622 MB and then again I rendered as AVI Microsoft Video then it came about 56 mb but quality is badly destorted.

As I said previously, you rendered to the default AVI template which is uncompressed, thus your incredibly large file size. This is not what you want to do.
I have found that, for me, impatience is not conducive to learning to become a good video editor.

NOW, THE NEXT STEP.

But first, I need a little information from you. What are you going to use your video for?
Are you going to view it on your Windows computer, post it online, make a DVD, email it, what? Is there a reason you need AVI? If so, what is it? Please tell me exactly what your intentions are and I will guide you, step by step, through the render properties and settings to achieve your desired output.

Please note, I have already rendered your video in many formats with very good results.

I have to put on youtube size 640x480
This is the actual size of the original movie. +
Some uncessary starting and ending has to be cut +
I have to put some text media showing the name of my daughter on the movie. There are some more movies with bigger sizes.
( Orignal movie I have already put on youtube
http://www.youtube.com/PraggyaRawal
)

Aahh, YouTube! Since you don't have AVC we will have to use WMV
The presets will not work well with your particular file size, so we're going to have to set some custom render properties. You will only have to do this once.
That is why I asked you to wait.

1) Open your edited Project.
2) Go to Project->Render As
3) In "Save as type" choose "Windows Media Video 9", not avi.
4) In "Template" choose "6 Mbps HD 720-30p Video"
5) Click the "Custom" tab to your right
6) Click the "Video" tab at the bottom of the new window
7) In "Image Size" choose "DVD Quality 640x480"
8) In "Frame Rate" choose "30.000"
9) DO NOT CHANGE ANY OTHER SETTINGS
10) Go up to the top and type in a name for your new template: "Nikon Coolpix to YouTube" or whatever
11) In "Description" type in:
Audio: 192 Kbps, 48,000 Hz, 16 Bit, Stereo, WMA9.
Video: 30 fps, 640x480, WMV V9 CBR 6Mbs,
12) Click the "Save Template" icon in the upper right hand corner.
13) Click "OK" at the bottom
14) Choose a name and location for your rendered file, if different from your Project.
15) Click "Save" and wait for your render to finish completely.

JOB DONE! Now in the future your new WMV 9 custom template will be available any time for you choose and use it again. You won't have to go through Steps 5-12 to make another YouTube video with the same settings.

Once you have completed your Project, here is some interesting reading to get you started down the right path. Good Luck!
http://www.sonycreativesoftware.com/forums/ShowMessage.asp?MessageID=660127&Replies=3

Thanks for guidance.
3. There is no Sony AVC there is PF and I saved as PF
6. Video Tab
Fame Size= NTSC= 640x480 (Square Pixcel )
There is no bitrate in my Sony Vega Movie Studio.
See the Image

http://s240.photobucket.com/albums/ff226/kkrawal/prob2.jpg


Now what to do?

You are looking in the wrong place. Once again, you are inside the AVI submenu. Once again, that is not where you want to be.
See steps #2 and #3 above. Follow the directions exactly.

I would like you to go to "Render As" (only!) and click on "Save as type" and see what options are there.
Do you see the window underneath in your screenshot? That is where you want to be.

It may very well be that AVC is not an option in your older version, but we'll never know until you are in the right menu. but if you will follow these directions exactly and post another screen shot, we will find something that will work.

I have to go to work now. I will check back this evening or tomorrow.

In step 3 you need to scroll up to Sony AVC. It should be there in the list somewhere.

Once you get that picked then step 6 will make sense.

@musicvid

You told
I would like you to go to "Render As" (only!) and click on "Save as type" and see what options are there.
Do you see the window underneath in your screenshot? That is where you want to be.

OK
See this image
http://s240.photobucket.com/albums/ff226/kkrawal/render_as.jpg

I am doing this and there is no such option

OK, I thought that might be the case since you have VMS 6.
The second choice for YouTube is to use WMV. That is at the bottom of the dropdown list in your latest picture.

I have altered the steps above to use the WMV template and to fit your coolpix video. If you do it exactly, the quality will be very good, and is about the best you can expect with your camera and VMS 6. (I don't recommend sending avi to Youtube).

At some point, you may want to consider upgrading to VMS 9 Platinum, which has the AVC encoder and will also edit material from HD cameras.

Youtube upload using WMV option as you directed in the last post.



Orignal Nikkon Quality uploaded on youtube


You can see the different yourself. Orignal one is much better.
What to do?