This is important:
iPod and iPhone can display video LARGER THAN 640x480.
You do not need to worry about exceeding one of those constrains.
iPod and iPhone will play any video of supported format with the following size guideline:
If the horizontal resolution (in pixel) = W, the vertical resolution = H, as long as (H/16) x (W/16) < or = 1200, then you will be fine.
For example, for a VGA resolution (640x480), you got W = 640, H = 480, thus 640/16 x 480/16 = 40 x 30 = 1200.
So if one of your constrain (such as the width of a 720x410 movie) exceeds the documented limit of 640, as long your vertical constrain remain small, you will be fine.
Therefore, you can always use the largest (original) resolution in HandBrake when decoding your DVD (which usually come in 720x4xx format) without worrying about playback problem.
Trust me, this is documented in MacWorld and I have tons of videos over 640 width playing on my iPhone.