hello skyline.
This may take a bit longer, but you can segment you video before even doing any of these processes. In the downloads section there should be a program called AVI Split:
http://www.mympxplayer.com/dload.php...le&file_id=222
If you started with AVI files, you can do it at the beginning or right after you use pocket divx (which is probably faster since you only have to convert one big file in the program instead of a bunch of AVIs).
Once you have all your AVIs from the first step, then use Imtoo and the AMV converter from steps 2 and 3 and you should be set.
This method sounds interesting though theskems, I havent used it yet and Ive been having a bit of an issue with the quality of my picture as well. I'll try it when i get home from work tonight.