RoadRunner, What version of MP3 Player Utilities do you have installed? For 160x120 I tend to use 3.57
HERE as you can adjust frame rate. I have posted configuration needed for 3.57
HERE. Version 3.68 will not convert 160x120. Version 4.0 will but is a little buggy and you can not adjust frame rate, you may have to edit the AmvTransform.ini to CHIPTYPE=1 if the 160x120 settings are not visible. Versions 4.03 & 4.05 have a setting for 160x120 but will actually convert to 176x128 which will crash your player.
I found AMV quality can be furthur enhanced by converting all video to .avi format then pre-processing through VirtualDub to make the following adjustments
Resize to 160x120 and cropping to remove black letterbox areas and keep video centered.
Change frame rate to 16fps to match my amv frame rate to prevent visible skipping.
Increase saturation , brightness and contrast to improve definition on the small screen.
Deinterlace and sharpen to improve clarity.
Adjust audio sync as I find their is a slight lag in my amv conversions.
I also save as a segmented .avi to break full movies into 4 to 5 pieces so that I can resume watching a movie at different stages rather than have to sit and slowly fast forward to the middle of a movie.
There is a guide on using VirtualDub
HERE