Ok, ok, I know you're going to hate me for saying this, but yes -- I do "waste" time converting videos. Ever since I found Handbrake, I love having the ability to let my desktop computer spend time and effort optimizing videos for playback on my handheld devices, customized to their exact resolution, rather than forcing them to muck around with real-time conversion of data. You can get a better quality of video and much smaller file sizes; what's not to like?

I sometimes do store 720p or 1080p videos on my N900, but that's for when I plug it into the USB port of a device with sufficient screen real-estate.