New pro/con: Problems with WMV-9, MPG-4 and XVID support can be solved by using a free opensource program called http://mediacoder.sourceforge.net/download.htm
Video settings: frames per second (FPS) 24 or 25, 600 KPBS
format Xvid, container AVI,
Picture settings: 320 x 240 - check the cropper settings you want
In the audio use the Lame MP3 settings no more then 44100 hz (probably 33,000).
New pro/con: Ebook reader can't read Pdf, requires text files