It looks like VirtualDub is the answer.
I gave it a quick try last night and it pretty easy to do what I want.
I did a quick test just using the Resize filter, and it did exactly what I wanted without introducing a lot of extra noise. The only problem is that it wants to take my 3.5Gig compressed divx file and output as a 58.0Gig uncomprressed avi.

Now I just need to do a little more research on how to use VirtualDub and I'll be good to go.
Thanks for all the help.