bluemonk, The converter is designed to convert at the maximum frames per second that the player can manage without crashing so the larger the resolution the lower the frame rate. The CPU in the player is only around 30-40mhz and is not capable of rendering high frame rates at high resolutions. I found that the best results I got for 2.0 inch LCD player was 208x144 at 12fps which gives a smoother video than the 10fps and the aspect ratio is better suited for wide screen movies.
You will also find you get better results if you pre-process your video with VirtualDub before converting to AMV. This allows you to resize the video, set the same frame rate to the same as the converter which avoids skipping from dropped frames, brightness, contrast etc.
There is a guide to using VirtualDub
HERE