I am a little puzzled here.

Actually the TI OMAP 2420 is very much capable of doing H264 encoding (baseline profile) for D1 resolutions (720x480 @ 30fps and 720x576 @ 25 fps) realtime.
So, H264 decoding for D1 resolutions should not be a problem at all.

I wanted to know if there any application for video decode which utilises the h/w accelerators on the 2420, or is all the work done on the ARM11, because that would be a waste of tons of resources available on the device.

PS: I do not own this device yet but will be getting one soon.