the tool http://www.rockbox.org/ hacks ipod nano g2 and done video plays!
a plugin names "MPEG Player" for dropbox made it to run videos (http://www.rockbox.org/wiki/PluginMpegplayer more documentation for perfect codec and displaysize& format to runs on ipod nano for small volumen on ipod...)
i need help to convert this moviez.
vlc shows an error with this message (german):
- Streaming/Transkodierung fehlgeschlagen:
VLC konnte den Encoder nicht öffnen.
input: videofile.avi
codec=
- video> mpeg-4 624x225 29,970089fps audio> mpeg-layer1/2/3 stero 44100Hz 48kb/s
output setting: mov.mpg
codec=
- video> mpeg-ps mpeg-2 200kb/s 176x132 audio> mp3 2channel 44100Hz
edit: i have testn it with a music video (youtube) and it runs but not with big moviez)