Replying to Best way to compress for the internet?

what is the best way to compress a large video file for online streaming while still retaining quality (keeping it HD)? I'm using FCP7. So basically what I am thinking is convert to quicktime movie and save a full high quality file and then use another piece of software to compress it? I've looked at a bunch of vimeo videos and they all seem to be at 1280x720 and in MPG format. I'm a noob at this so if someone with experience wants to walk me through it that would be awesome.