I agree that h.264 is an excellent choice for good quality/small size format… in my experience though, not everyone has that codec installed in their browser.
I’d advise to go with a flash format (.flv) OR mpg 1 if you will only have 1 link to the reel.
In answer to your questions, try to limit your file size to 10mb or less for a 320x240px reel. For a larger size, you need to ask yourself if your intended target audience has the bandwidth to view your (larger file size) reel quickly or are willing to wait for the reel to download/stream.
You can render the high quality file out from AE and then use Sorenson Squeeze, Apple Compressor or Cleaner to convert to the flv/mpg/h.264 file.
Having two viewing options (1 quicktime, 1 flv) is not a bad solution either. Another solution, is to upload your reel to Vimeo and then use one of their embed links to insert into your webpage.