If you noticed I wrote \"up to 1500 Kb/s\". Yes, it produces large movie but it still plays nicely on my C750. As I wrote the main trick it the resolution - Zaurus cannot do better than 320x240 wit no scaling. You can play with bit rate to make movies smaller and still keeping quality at decent level.
I\'ve experimented with a sample clip, originaly 640x480 WMV 1500 Kb/s. I\'ve converted it into 4 formats (320x240, 1500 Kb/s): MPEG1, MPEG2 (must be deinterlaced), WMV8 and DivX 5.
All of them play well with tkcVideo and kino2 (via mplayer), except for WMV8 - tkcVideo produces no sound and mplayer does not play it smoothly. Maybe because of high bit rate.
DivX is probably the best choice in terms of quality/size.