I am starting this thread to find what the best combo of video ripping software / rip settings / and mobile player software is.
I can get good results with DVD's ripped into standard MPEG-4 videos with a program called #1 DVD Ripper version 7.x (they are up to version 8.x but I get better results with the older version) and played back with Coreplayer v1.3 in QTv mode. Standard DVD's all come in 480p resolution. Because most movies usually have a 2.4/1 or 2.35/1 pixel-to-aspect ratio (PAR) part of that 480p is going to be the black matt (bars) on the top and bottom of the picture. If you crop out the black bars you are left with about 360 vertical pixels. Since the Diamond's screen has a 1.33/1 PAR I think it looks best to crop the original video to about a 1.5 PAR. So, that leaves you with a max resolution of 540x360.
If you rip your DVD's with #1 DVD Ripper v7.x in list mode into standard MPEG-4's with the "iphone" profile at a res of 540x360 and 1000 kb/sec coreplayer can play these videos quite well (Benchmark scores of about %110). You will have to edit the file for that profile with a text editor to add the 540x360 resolution.
I am using the stock Sprint ROM
Here is a test vid for ya...in Corplayer I get smooth playback and benchamark scores of around %110
MPEG4 540x360 840kbps.zip