Here's the current text on encoding for iPod / Apple TV, from a
forthcoming version of the podcasting technical spec. Details may
change slightly, so check the technical spec page for anything new:

http://www.apple.com/itunes/store/podcaststechspecs.html

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Formatting Video for the iPod or Apple TV

Although iTunes can play a variety of .mp4, .m4v, and .mov video
formats, Apple TV and the iPod require more specific formats.
The iPod supports up to 640x480, while Apple TV supports up to
1280x720. To optimize for both platforms, we recommend that your
source file is at least 640 pixels wide and that you use the built-in
iPod converters in Compressor ("H.264 for iPod"), QuickTime Pro
("Movie to iPod") or iTunes ("Convert Selection for iPod"). Each of
these maintains the aspect ration of your source file and results in
an M4V file containing H.264 video (Low Complexity version of the
Baseline profile) and AAC-LC audio. 

If you want to maximize the screen area of a wide-screen TV, your
source file should have an aspect ratio of 16:9 (e.g., 640x360). If
you want to maximize the screen area on the iPod, your source file
should have an aspect ratio of 4:3 (e.g., 640x480).

Because it uses H.264 Main Profile, QuickTime Pro's "Movie to Apple
TV" converter will result in a video that will not sync with the iPod.

Refer to the specifications below if you are not using the built-in
converters in Compressor, QuickTime Pro, or iTunes.
iPod can play the following video formats:

   * H.264 video, up to 1.5 Mbps, 640 x 480, 30 frames per sec.,
Low-Complexity version of the Baseline Profile with AAC-LC audio up to
160 kbps, 48 Khz, stereo audio in .m4v, .mp4, and .mov file formats
   * H.264 video, up to 768 kbps, 320 x 240, 30 frames per sec.,
Baseline Profile up to Level 1.3 with AAC-LC audio up to 160 kbps, 48
Khz, stereo audio in .m4v, .mp4, and .mov file formats
   * MPEG-4 video, up to 2.5 Mbps, 640 x 480, 30 frames per sec.,
Simple Profile with AAC-LC audio up to 160 kbps, 48 Khz, stereo audio
in .m4v, .mp4, and .mov file formats

Apple TV can display H.264 video, up to 5mbps, 1280x720, 24 fps,
Progressive Main Profile. Apple TV supports AAC-LC audio up to 320
Kbps. The gating factors for video are bit rate and frame rate. The
following are some sample conversions generated by the QuickTime Pro
when choosing "Movie to Apple TV":

Input                   Output
640x480, 30fps          640x480, 30fps, 3mbps*
1280x720 24fps          1280x720, 24p 5mbps*
1280x720, 30fps         960x540, 30fps 4mbps*
1920x1080, 24fps        1280x720, 24fps 5mbps*
1920x1080, 30fps        960x540, 30fps 4mbps*
1080i up to 60fps       960x540, 30fps 4mbps*
* Represents an average bit rate.

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-Scott

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