Hello
I wasted an awaful lot of time repeatedly converting video for my "32gb sucker" device.
The demo clip was impressive so I fed it to this video format querying utility
AVIcodec, a free multimedia file analyzer
In my instance it showed that video was xvid and suggested that audio had to be mp2 rather than mp3 (but it will play plain audio mp3)
I then used the avs video converter to take some dv down to 320 x 240 , in initial tests it managed to cope with the original 25 fps and a 1000 bitrate setting (but perhaps yours might not).
My next problem was wondering why the 3rd 4th 5th etc clips that i transferred would not play, I assumed it was some change that I had made but when I realised that the files would not transfer back for testing I wound up at this site and realise that i have been defrauded, 3+gb of video in a 2gb device will never work...