Begin by either opening your movie file with Compressor or sending your Final Cut Pro 7 project to Compressor. This will bring the project into Compressor in the upper panel.
Below will be the codec options for compressing your video file, and these will range from optional presets to codecs by name. Open up the Apple folder and then find the Other Formats one. In here you are going to want to go down and find Web, which is at the bottom of the available folders under Podcasting.
Since you are trying to find the best compression rate for streaming video go to Streaming, which is below Download and above Web Videocast. Here you are going to have two options: QuickTime 6 Compatible and QuickTime 7 Compatible. This choice is really going to be up to you. If you are operating a newer QuickTime format then QuickTime 7 Compatible should be fine, otherwise QuickTime 6 Compatible will be good. It is generally a good idea to go with QuickTime 7 Compatible in most cases.
Once you open up your chosen folder you will have five possible compression rates ranging from H.264 100 Kbps Streaming to H.264 LAN Streaming. This essentially ranges from the smallest compression rate among the streaming, which is H.264 100 Kbps Streaming, to the largest, which is LAN Streaming. How you choose among the five is also going to be regulated by how large you can allow your file to be and how much room you will have on your streaming server. If you are using a format like YouTube or Vimeo you should be fine with the LAN Streaming format, but if you need to compress and upload a whole host of files then you may want to go with one of the tighter compression codecs.