Hi There!
I'm new on this forum and perhaps I can become a bit useful in this issue. I've experienced EXACTLY the same problem with a generic device named
BOOLEE - straight form China...
Checkout here:
Boolee devices
For few weeks I was struggling with all possible converting software and penetrating web forums - with no result.
Endpoints:
1. Early this year a new codec was introduced in China and is used practicaly only in this region:
MEncoder
Sherpya-MinGW-20060312-4.1.0.
2. It acts like an XviD 1.1 final, but it's not and delivers a lot of trouble.
3. Don't bother to search for a download, because there is no standalone version yet (Nov, 2006).
4. Also don't try to discuss the quality of this codec - the issue is
propper shrinking and
displaying on mentioned devices...
5. Meanwhile, forget also such good tools as
VirtualDubMod,
WisMencoder or (very modern modern open-source) -
MediaCoder - including MEncoder settings.
All you need is the original
AVConverter v 1.0 with the Sherpya codec inside:
Features:

No installation required

Contains all other codecs & filters

Conversion time: ca 5-10 min for a 1,5 hour movie

Compression ratio: 2:1 (350 MB out of a 700 MB movie)

Compatibility: I've checked it on WinXP and 2K => O.K.

Volume - ca 30 MB (unpacked)

GUI language: Chinese simpl.('till now)

but very simple:
Usage:

Input file name

Output file name

Click the button (lowest, left) to convert...
TroubleMaker 2:
RESOLUTION. Analysed: 224 X 176 => this is
false!
Encode using 220 X 176. If you analyse the output file (i.e. with GSPOT) - you will find out it's
224 X 176...
Although the name of such a device is "MP4 Player" - most of these simple players originating from China are based on the same chip and configuration which accept only
AVI files, so don't use an iPod processing machine for a mp4 output. - It wont work! (of course - unless it is reccommended by the producer).
Feel free to email me on details.
KINRU
P.S. Don't ask me for the AVConverter - try eMule or other sources - it's a freeware.