Video processing in Linux

To split video, one good tool is Avidemux.

And to compress the video the command transcode might be used.
transcode -i myinput.mpg -o myoutput.avi -y xvid4

Other useful commands are mencoder and ffmpeg
http://gentoo-wiki.com/HOWTO_Mencoder_Introduction_Guide
http://electron.mit.edu/~gsteele/ffmpeg/