qqvga is one quarter vga resolution or 640x480 divided by 4 is 160x120 . Although that is just a size. I'm not sure what format you need but if it is avi then you can pick out avi, and click the options button. In the video size ___X___ put 160x120.
A preset is a pre-configured video conversion. Or "pre-setup", so if your looking for an mpg for 720p you can just pick leave it, or if you want 1080p you pick it without having to change the settings. Although i don't know if any presets include 160x120 that i know of.