Here is what I decided to do (and have since done):
I made a version of the game with comic-style cutscenes (3D rendered, not toon-style) in AVI format. The average cutscene is about 50-70 kilobytes unzipped. This is much more manageable. I will have this as the main pack, and have 2 addition packs. One with a low-res movie add-ons, and one with a high-res add-on pack.
The only problem is that now that I've gotten more proficient in Blender, I'm going back and re-doing a lot of the already completed AGS cutscenes in 3D
Its an addiction.
Thanks for the advice guys.
-Bill
I made a version of the game with comic-style cutscenes (3D rendered, not toon-style) in AVI format. The average cutscene is about 50-70 kilobytes unzipped. This is much more manageable. I will have this as the main pack, and have 2 addition packs. One with a low-res movie add-ons, and one with a high-res add-on pack.
The only problem is that now that I've gotten more proficient in Blender, I'm going back and re-doing a lot of the already completed AGS cutscenes in 3D

Thanks for the advice guys.
-Bill