Video conversion tools and settings?

[fuzzybabybunny]

so now that I've finally got a phone with a screen big enough and high res enough to watch movies on, I'd like to start using it for such. The problem is getting the right video format that'll play smoothly on this thing. I've had lots of wmv files play really stuttery on this in both CorePlayer and WMP.

What programs do you guys use to convert your downloaded file formats (avi, wmv, h264, etc) into usable ones on the TP2? And what output settings should it have? I'd like to keep it at 640 resolution for this beautiful screen.