What is the best codec for re-encoding HD video?

I'm using XviD4PSP (the only program that maintains the color space of my videos).

I'm also encoding to .MKV, using H.264 with a CBR of 20-22.

I used to encode to .AVI, using MPEG4 with a bit-rate of 5,000-7,500Kbps.

This is really most of what I know.

Is there anything else I should know? Are there better codecs out there?

I want to lower the file-size of my files (because they're captured uncompressed), but maintain as much quality as possible, because a lot of them are home videos and they're very important to me.

Thank You!