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In my experience, 1500 for 640x480 video is pushing the limits of the PMP's hardware. Sometimes it works, sometimes you may lose AV sync. (It doesn't frameskip, it ends up rendering the video frames slower.) If you're converting an existing AVI, you could check the bitrate via GSpot and try to match that bitrate in iriverter. (Not sure what a DVD's bitrate would be, but most of the videos I've been checking out and converting have bitrates in the 600-900 range.
I wouldn't hold your breath waiting for a new firmware. The consensus is that the source code package we have is incomplete. Other then one mysterious script, I'm not sure what all is missing.
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