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If you're only using the video on the iPod screen, you won't benefit from a video with a higher resolution...it will be scaled down as it's displayed.
If you're concerned about quality, a higher video bitrate will give you a better quality picture at a given resolution (to a point--basically, raise it high enough to avoid seeing the "blocky" effects you'd normally see with compressed video).
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There are two secrets to staying young, being happy, and achieving success. You have to laugh and find humor every day, and you have to have a dream.
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