Why are the converted video files so large?

By default iVI creates videos files with a very high level of quality. You can easily change this to produce much smaller video files. Open iVI's preferences window and the select the Advanced tab. In this tab you can reduce the quality level of the video files which will reduce their size. Even setting the quality levels one or two levels lower will make a big difference in file size and might not make much difference in visible quality. iVI will tell you as you move the quality level what a 'worst case' video file size will be so you can better judge where to move the setting.