Launch iSquint.
Click "Optimize for iPod" in the "Settings" box.
Move the "Quality" slider to "Go Nuts" for high quality video. Higher quality means larger file sizes, so use the slider at your discretion. "Standard" is the default setting and is OK for most videos.
If you have AVI format movies and want to take them with you on your iPod, you need to convert them to a format compatible with iTunes and the iPod. Quicktime Pro can do this, but the program isn't free and tends to convert files slowly. You can convert files quickly and for free using iSquint, a small program that just converts movie files (.avi, .mp4, mov, .mpg among others) to a file your iPod can play.
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