Yes it does. Its compiled with ffmpeg. Here is the info from the ffmpeg build

FFmpeg version SVN-r11353, Copyright (c) 2000-2007 Fabrice Bellard, et al.
configuration: --prefix=/usr --enable-libmp3lame --enable-libxvid --enable-libx264 --enable-pp --enable-gpl --enable-liba52 --cc=arm-linux-gcc --enable-pthreads --arch=armv41 --enable-libfaac --enable-libfaad --enable-libvorbis --enable-libtheora --enable-libnut --disable-optimizations --enable-libamr-wb --enable-libamr-nb
libavutil version: 49.6.0
libavcodec version: 51.49.0
libavformat version: 52.3.0
built on Dec 30 2007 17:07:05, gcc: 3.4.4 (release) (CodeSourcery ARM 2005q3-2)