Some considerations for coding H.264 videos for Youtube. I've created my own Sony Vegas rendering templates following those guidelines:
Youtube recommends a bitrate of at least 5.000kbps for standard, and 30,000kbps for high quality 720p video. 400MB into 12 min corresponds to 4,000kbps, which is close to youtube's minimum recommendation. Select variable bitrate to get the best possible quality. You can play and lower the bitrate as long as the resulting quality is OK for you. But below around 2,000kbps you may want to consider switching to a lower resolution (e.g. 480p)
The framerate should match that of your footage. I would not recommend rendering a 30fps video into 25fps or something like that, as the resulting quality will be rather poor. But you can rather safely cut the framerate in half, converting 50fps into 25fps or 60fps into 30fps.
Interlacing is recommended to be off for youtube ("Field order: None (Progressive scan)"), but if your footage is interlaced, I would stick with the same setting.
Using H.264 codec, youtube recommends using high profile (which improves quality a bit, but increases rendering time). It's OK to switch to "main" if you want to have faster rendering times.
Finally - you have to decide whether to use Sony AVC or Main Concept AVC. I use Main Concept for no specific reasons. You can find some discussions about that topic here: http://www.sonycreativesoftware.com/Forums/ShowMessage.asp?Forum=4&MessageID=886487 .
What Youtube says:
Here you can find Youtube's encoding recommendations: