This took a while to figure out.
I wanted a generic command that would resize the video to 320x240, regardless of whether the source was in widescreen or not; and if widescreen, then crop only the middle section out.
Note that the original framerate is maintained. You could probably save some more space by dropping the framerate to 15 or 20 fps.
If you want to save more space, try dropping the audio bitrate, and adding :vbitrate=500 to lavcopts.
mencoder -of lavf -lavfopts format=mp4 -oac lavc -ovc lavc -lavcopts aglobal=1:vglobal=1:acodec=libfaac:abitrate=128:vcodec=mpeg4:keyint=25 -vf scale=-3:240,crop=320:240,harddup -noskip -af lavcresample=44100 -o output.mp4 input.avi