You should go higher than 5Mbps just to see for yourself.
But if you want my notes...
There is a point of diminishing returns with MPEG bitrates. It's based on several variables, weighted heavily by the source format (and its inherent flaws) and the content itself. For a 352x480 video, coming from standard consumer sources, assuming non-specialty content, you'll gain minimal benefits by increasing bitrate.
The sources that benefit most from higher bitrates are sources and content with higher motion, complex images, and finite details. At 352x480, or from VHS/TV sources, there's not much fine detail. Complex images are out, unless it's some sort of teaching video with diagrams, crowd shots at sports events, or high art with tons of nuanced colors. Fast motion can be movies, but is often sports. The most common "fast motion" is camera shake on home movies.
Wrestling is easily one of the most complex types of content, because of the pans and wide shots that include crowds with camera flashes. That's just hell on an MPEG encoder, and it need any bitrate you can spare.