I tried several formats with acidrip. I guess mencoder doesn't produce the correct format. I had to use ffmpeg after ripping.
I don't understand, because the output format is the same as the input file so ffmpeg produces the same format file, but only the output file works with the ipod video.
Here's the page with the technical specs:
ipod is very finicky... however, it works now, but I have to do ripping and encoding separately.