the playback really depends on the quality/speed of the network you have access to - I'm at a certain south coast university (UK) and the network here at work is very quick, and the playback is very smooth on the BBC iPllayer.

I've also streamed video online from a webspace I have access to, and even at home it is smooth playback, no stuttering or slowing of the video.

I've also starting using the nokia n800 video converter (from http://xoomer.alice.it/sepaolo/n800vc/) which converts to specific N800 screen resolution, and is excellent (film typically 600-800mb) - excellent for the train or bus journey, and it pisses all over the ipod for video playback