KindleGen actually will normally triple the size of the file. Inside the file is the original ePub, a Mobi version of the file and a KF8 version of the file. You can use kindlestrip to remove the copy of the source leaving you with double the size. I would not recommend reducing it further; both internal copies are usable depending on the device. The mobi version is usable on devices that support mobi and the Kindle1 and perhaps Kindle2 and I believe KindleDX while the KF8 file matches the ePub for display capabilities and is usable on all other kindle devices.
However if you are tageting only mobi version then you can use Kindleunpack to take the file apart.
Dale
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