I did a test last week, here's what I found:
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DISCLAIMER
These "tests" were done by an amateur, me. I do not work in the video industry, nor am I an audiophile. I know what I like and can compare images side-by-side pretty well. I like clear, well balanced audio. Take these results and opinions as you will.
GENERAL INFO
Don't ask me why I picked SW:E3. I just did. I realize its a long-ish movie, but I see a lot of movies getting to this length these days. It has good action scenes (for judging fast motion) as well as some good music (to judge audio by, duh).
My goal for this was to find the best settings to rip a DVD using HandBrake to a file that would be for the iPhone only (no iPod or Apple TV). I realize this all could be a colossal waste of time, being the iPhone is not out and no one really knows much about video playback right now. But I wanted to have a few movies ready for when I get my hands on one. (That, and I had a colossal amount of time to waste.)
I started off using the iPod setting in Handbrake, and then tweaking from there. I'm assuming that the iPhone will play the same types of movies that the iPod can, so I felt this was a safe starting point.
And now, on to the results!
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Movie: Star Wars Episode III
Runtime: 2:19:58
Aspect Ratio: Anamorphic Widescreen (2.35:1)
Software: HandBrake 0.8.5b1
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Constant Settings
VIDEO
File Format: MP4
Codec: AVC/H.264 Video / AAC Audio
Create Chapter Markers: On
Framerate: Same as source
Encoder: x264 (h.264 iPod)
Pixel Ratio: Source: 720x480 Output: 480x208
2-Pass Encoding: On
Keep AR: On
Deinterlace: Off
Anamorphic: Off
AUDIO
Track 1: English (AC3) (5.1 ch)
Track 1 Mix: Dolby Pro Logic II
Sample Rate (Hz): 48
Settings That Changed
Video (VBR)
Average Bitrate (kbps)
Audio (ABR)
Bitrate (kbps)
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TEST 1
VBR: 1000
ABR: 160
File Size: 1.14GB
Verdict: Video is good. Close to 1500kbps VBR but slightly lower contrast and detail. Audio is good as well.
TEST 2
VBR: 1500
ABR: 160
File Size: 1.63GB
Verdict: Video is best of the bunch. The difference 1000kbps VBR is fairly minimal, but can be seen in high detail areas. Audio is good as well.
TEST 3
VBR: 256
ABR: 64
File Size: 324.1MB
Verdict: Video is poor. Lots of pixel artifacts. Washed out colors and low detail. Audio is poor as well. Noticeable difference from the 160kbps and 128kbps versions.
TEST 4
VBR: 1000
ABR: 128
File Size: 1.11GB
Verdict: Video is good. Close to 1500kbps VBR but slightly lower contrast and detail. Audio is good. Can't really distinguish from 160kbps version.
TEST 5
VBR: 500
ABR: 128
File Size: 632.3MB
Verdict: Noticeable difference from the 750kbps VBR. Not quite worth it.
TEST 6
VBR: 750
ABR: 128
File Size: 882.6MB
Verdict: Very close to 1000kbps VBR, but the 500kbps VBR was a bit more noticeable.
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FINAL VERDICT
So, I'm thinking that Test 4 (1000kbps VBR and 128kbps ABR) is the way to go. It gives good video quality, good audio and saves on file size, chiming in at 1.11GB. I think that most movies (those under 2 hours) would come in under 1GB, which would be nice.
I would be willing to go down to 750kbps VBR but if the iPhone's screen is as sweet as the rumors say it is, I think good video quality is key. Of course, if you're not concerned too much about squeezing out every MB, go for the 1500kbps VBR (or even higher if you're crazy enough!)
I will test out the top 3 once I get an iPhone, but I have a feeling I'll land on Test 4. But I wouldn't be surprised if I go for 1500kbps VBR if the iPhone's screen is just too sweet.
Audiophiles (or anyone else really) may disagree with me on the 128kbps vs. 160kbps ABR, but personally I can't really tell the difference. At least not with the 20 minutes or so I spent with this test. But in this test it only saved 30MB of space between the two, so take that into consideration as well I guess.
I am not only open to, but I am eagerly awaiting any feedback/criticism/suggestions to help me out. Like I said, I'm no pro (and it probably shows).
I've read that switching the Track 1 Audio Mix to "6-channel discrete" lowers the files size, but I don't know what it will do to the audio. If anyone has any experience here, don't be shy.
I hope this helps someone. Thanks for reading!