MPEG4 Testing Results-
I don't have a video out cable yet, so this is just to see what the iPod can handle. I will test output to a TV later.
I can play back 1Mbps 640 x 360 MPEG4 video on my iPod. It looks great on the iPod, with no noticeable scaling artifacts. This should output great on an analog TV! There were no skipped frames or anything like that either.
Since I only used 1-pass encoding, the compression quality is iffy. But 2-pass encoding should give pretty good results at 1 Mbps if I'm not mistaken. EDIT- I just realized max bitrate is 2.5 Mbps for MPEG4, that means the sky is the limit and we can get great quality VGA-level video on iPod!
For most videos, 320 x 240 will be sufficient. But this gives us another great option for ripping certain DVD movies, etc. intended primarily for TV playback. It also looks great on the iPod screen, the only drawback is that file size is much larger (around 1 GB per movie.) On PDA's and the PSP, that is a significant drawback due to cost of flash memory. On a 60GB 1GB is nothing- 😉