you cant go smaller than midi, because midi files contain only musical notation, and it relies on your sound card to read in the notes and create music with it. no other audio format does this, all the others store the entire music in the file itself (for obvious portability reasons).
if you want the .wav file to travel in the PPT file, I believe there is an option in the Powerpoint options/settings which lets you set the maximum size for embedding files into a presentation. I believe the default size is set to 100k, which means anything over 100k will not be embedded, it will instead just link to the file on your hard drive. So to solve the problem, just increase that number to something bigger and re-add the wave file into your presentation.
I am unfamiliar with what audio formats PPT supports, but also try converting to mp3 and put that mp3 into your presentation.
