Edit:
Just to be clear, there is no Diamond specific video format. Mpeg 4 Divx works best on the diamond. (best is even a loosely used term, it works period, that's all that matters)
This format is also great for WM 6 phones in general.
/Edit
As you all probably already know,
Divx Mobile works great on the Diamond. And it can play full 700+ megabyte Divx movies pretty well (but not perfectly, should run 30 frames per second, but with phone lag runs about 20), even with several applications running and TF3D enabled on the stock sprint rom. I'm a video professional / graphic designer / developer / whatever the F else you need for your company....and in my humble opinion, it is literally impossible to find an easier easier to use video converters than the ones
ImToo makes. These programs convert all your digital movies whether it be DVD or downloaded Divx movies, to smaller file sizes and better formats to make them run perfectly on your Diamond.
Just open the program, drag and drop ANY of your movies in any format...
(from special format mpegs like the movies from old cell phones, or new ones like iPhone which uses video formats specific for the phone itself, to new h.264 HD format movies, it can handle ANY VIDEO)
...into the program and convert it to ANY other format.
So if you use
ImToo Mpeg Encoder to convert your Divx movies just drag and drop say a full Divx movie into the program, and set the output resolution to that of the native resolution of your Diamond when full screened, set the bit rate a little lower and you can now have mobile versions of all your digital movies in about 4 clicks of a mouse.
or
ImToo DVD Ripper Platinum for your DVD's....this program just takes DVD's that are currently in your DVD drive, or ones that you have ripped the original files onto your computer, and converts them to any format (like I said Divx format is fine for the Diamond, and use Divx mobile to play them), again, in about 4 clicks of a mouse.
These programs are CHEAP, especially when compared to other pro quality video convesion programs (I mean being able to understand pretty much any format under the sun when I say pro), only about $30-$50 for a lisenced version, and trial versions are available for download.