I have a N810 (N800 should be the same) And I can play ANY unconverted video with mplayer. On some videos it will lag for a few seconds but that is all. I Have played full Dvix DVD rips. It played them perfectly. No special conversion. I assume with the conversion that it would take out the few seconds of lag I get on some videos but I don't bother.

As I type this I am watching The Matrix Reloaded, XVID Codec, 593 kbps, 560 x 240, mad audio codec, 128kbps audio. But it has played better than that.