I have ran XviD's as high as 1200kbps that were recorded from DVD's with FairUseWizard. The soundtrack was recorded in MP3. I do this because my main PMD is an Archos and Archos requires a $20 plug-in otherwise. Perhaps MPlayer also has the same sound limitation.

These videos play great in MPlayer with no skipping or stuttering and the sound stays synched to the video. They are too much for the built mediaplayer.

The Mplayer limitation is somewhere between 1200kbps and 1500kbps. A file I recorded at 704x368, 1504kbps stuttered and froze. One at 688x288, 1240kbps played fine.