I have the 1.5 inch player and I used pocket divx encoder to encode my dvd, i set it at 128x128 resolution in the divx encoder, and used the default quality settings.
I then went to use the amv converter and it came up with strips of random parts of the screen while encoding, which hadnt happened to me before so I went back into pocket divx and selected "resynch video/audio" and it worked fine for me.
here is a pic of my player with 2 fast 2 furious on it full screen, i think keeping the black bands on the film was good cos the people arent 2 stretched:
2 fast 2 furious on my player
sorry for the crap picture quality, it was taken on my phone and the screen on the mp4 is really shiny :wink: the video quality is good, but sometimes hard to see on dark screens (e.g night)