brignuca,
If your player is a 4GB then it is a Fake, no 4GB chipods at the moment. Your problem could be due to the hacked memory chip.
Firstly try a conversion at 128x96 and see if you have any errors.
The other thing you can do that may help is pre-process your video with VirtualDub before converting to AMV.
You can download VirtualDub here
http://www.mympxplayer.org/virtualdub-mpeg2-df370.html
I have uploaded a VirtDub settings profile here
http://uploaded.to/?id=9de70b
Open VirtDub and load the video you want to convert. Press CTRL+L and load the settings profile then select file save as AVI
Once you have passed the video through Virtualdub then convert it to AMV 128x128, frames per second mediun , image quality high, mode=0
If this does not help then I would say your hacked chip is causing the problem.
Let me know how you go.