TIPS: HiRes 720×304 MPEG4 possible on the video iPod - TUAW
The Unofficial Apple Weblog (TUAW) report success at playing a higher res on the video enabled iPod.

As a follow-up to my earlier post about compressing movies for the iPod, I just wanted to note that I just finished successfully encoding Star Wars Episode IV: A New Hope directly from DVD to iPod format using the version of Handbrake linked to at Accelerate Your Macintosh!The resulting video is an MPEG4 file, weighing in at 1GB in size and at a 720×304 aspect ratio. More than is needed for the iPod itself, but it does play on the iPod and displays nicely on an external TV set. Not too bad.
Read source article: The Unofficial Apple Weblog (TUAW)
Lookup on Amazon: “Apple 60 GB iPod with Video Playback Black” (Apple Computer)
Technorati Tags: ipod video, portable entertainment, portable video