I just usually follow this setting, as adonis have taught me...
QUOTE
-apply settings - "3gpp compliant"
-"video encoding", change to iso mpeg4.
-"audio encoding" change to mp4 aac
-"interporability" change to 3gpp>mpeg4 SP @level 0, and audio to aac
-"image processing" - cropping resizing>and change to qcif (176 x44)