I would still host on Vimeo, because it allows people to download the original file. Either that or Rapidshare/Mediafire, but I don't know what the file size limits are. If you need to convert your video to make it smaller, I would recommend trying Handbrake: http://handbrake.fr/
It will convert most video formats now, your AVI will probably work, and all you have to do is enter a target size and it will automatically choose a bit rate. You can convert to MP4 or Xvid. Also, be aware that you will never get a decent quality file at 50MB except maybe in FLV format. If you compress it in a really good rar file (using the slowest compress setting in Winrar) you should be able to shave off a good chunk of size.