Just FYI, the settings I use for 16:9 widescreen resolution videos in Media Convertor are:

770 MPlayer Optimal 400x240
1024 video bitrate
96 audio bitrate
Optimize for 770 full screen (crops video)
High quality conversion (2-passes)


These settings give me the best quality video, although in fast moving scenes there are a few dropped frames here and there. I've tried smaller video bitrates but it results in pixelation and lower quality. 96kbps for audio bitrate is a little low when using high quality headphones, sometimes I do 128kpbs. Note that for 16:9 widescreen resolution video I use the "Optimize for 770" option which crops the frame, since the 770 has a 15:9 screen ratio. This causes you to lose a little of the picture, but it corrects for stretching/squishing of the frame.

I have yet to be able to properly convert videos with a 4:3 video resolution ratio. Using the "Optimize for 770" option overly crops the frame, turning 4:3 into 15:9 by cutting off huge chunks of the top and bottom. Without enabling that option, I get a 4:3 video that is stretched width wize to 15:9.