SMR is just another hacked MS MPEG4 codec (like angelpotion and Divx311). DivX 3.11 is fine as long as you are using SBC (Nandub to encode).
XviD is hardly new... the project basically started when OpenDivX ended, i.e. when DivX 4.0 was released.
I would suggest processing the sound before the video, so that you know how big the video should be and therefor what bitrate to set.
There really is no "best" codec, DivX311, and 5.xx, XviD, WMV 9 and RV9 are all fine, however RV9 can't be used in an AVI if that is what you are after.
Personally I would recommend XviD although it will take some work/research to get the best out of it.