Thanks for the detailed report. You raised an important potential issue with aspect ratio. We should at least check that the commonly used transcoding tools for Nokia 770 (770-encode.pl and Media Converter) handle this gracefully and ensure that no scaling would be used. As for using -noaspect by default, I'm not too sure, some videos may have a really strange aspect ratio that needs to be corrected.

By the way, you can use '/home/user/.mplayer/config' instead of '/etc/mplayer/mplayer.conf' for adding your options. It is highly recommended to do so, as '/etc/mplayer/mplayer.conf' gets overwritten with default options on any mplayer upgrade and you would lose your settings.

Also if you track garage news page, you probably noticed announce about kmplayer getting some initial mplayer support