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I know this thread is several months old, but I wanted to post another answer for anyone who might come across this thread searching the forum. Avidemux is a gui application which is very easy to install (at least in Suse and Ubuntu). It takes most types of video as input, and has a wizard to create video formatted for the Ipod. All you have to do is open the video you want to convert, and click on Auto/Ipod (mpeg4). Avidemux will set the audio and video codecs to create ipod video.
One thing I did notice about this wizard is it doesn't add an audio filter to convert mono to sterio (which is evidently needed to process the audio codec it uses). If you get a strange audio error when saving to ipod format, try clicking on Filter, and then selecting Sterio from the mixer dropdown list.
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