If you're obtaining your movies legally, then you should have no problem having them in the right format for the iPod/iPhone.

Ripping straight from DVD, I always choose h.264 since it plays on my PS3, xbox 360 and my iPhone.

If you happen to download them illegally, you just need a program like visual hub and it can batch convert movies and automatically load them into itunes for syncing.

Everything to do with video and audio is a PITA on the N800. Only linux nerds enjoy their media on these tablet devices.

For everything else, its quite decent... but don't confuse the N800/810 with a capable media player.