Wow, sounds like people keep throwing around different solutions! I'll provide another, since I work with video all the time. But only solutions that work.
If you have QuickTime Pro (which I'm assuming you don't have, so pop $50 on it if you can), then the easiest solution is to download Perian (which is a codec that decodes many formats), install it, and use QuickTime Pro to convert it. When you open the FLV file in QuickTime Pro, you should use the "Export To Web" option, allowing you to convert into small web files (such as iPhone/iPod Touch).
If you DON'T have QuickTime Pro, then I believe you can use MPEG Streamclip to convert files. I'm not sure if you can do it if you don't have QuickTime Pro, just because I've only used MPEG Streamclip with QuickTime Pro installed. BUT, you still need Perian installed, or else it won't read the file.
MPEG Streamclip uses the QuickTime plugin to read/export files. So essentially, it is QuickTime wrapped inside another program.
There are other solutions (such as Sorenson, etc), but those are Pro applications that cost thousands, which you won't need. QuickTime Pro is the best and cheapest solution to converting ANY formats; iSquint is best for free and converting to web-based formats.
Perian is needed to read ANY FLV file period. There's no other solution in OS X, unless you build or use a flash player that will read the file. BUT, you won't be able to convert it if you use the flash-based player.
How do I know this? I do web development and video editing. So take my word for it.
::EDIT::
I do have a question though. How did you acquire the FLV file from that site? Did you use Safari, and grabbed the FLV file from the Activities window? Or did you use another program to use grab the FLV file? I'm wondering why you're getting a "VIDEO_TS" error. That only occurs if you're converting straight from a DVD.