Avoid releases using outdated codecs like DivX or XviD. The x264 version is vastly superior for animation.
Once you have obtained the Tangled -2010- 720p Blu-Ray x264 -Dual-Audio- -Eng Games file, you need the right setup.
The hits the sweet spot: it is 10x smaller than the disc but 10x better than the DVD.
Tangled is famous for its "painterly" aesthetic. The x264 codec does an excellent job of preserving the soft textures and the breathtaking "Kingdom of the Lanterns" sequence without heavy compression artifacts.