I've found that Divx or Xvid encoded files with MP3 audio (800kbps/128kbps respectively) work best. Also, a resolution of no more than 480x300 works best. 480x240 max though is preferred. To get these resolutions, so long as you're not converting down from some oddball format like MKV, just use VirtualDub or DrDivx to make the conversions. Both are free. The advantage of DrDivx is that it does things in batch. The advantage of VirtualDub is that you can tweak till your eyes bleed.