according to Apple's site:
Quote:
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Video formats supported: H.264 video, up to 1.5 Mbps, 640 by 480 pixels, 30 frames per second, Low-Complexity version of the H.264 Baseline Profile with AAC-LC audio up to 160 Kbps, 48kHz, stereo audio in .m4v, .mp4, and .mov file formats; H.264 video, up to 2.5 Mbps, 640 by 480 pixels, 30 frames per second, Baseline Profile up to Level 3.0 with AAC-LC audio up to 160 Kbps, 48kHz, stereo audio in .m4v, .mp4, and .mov file formats; MPEG-4 video, up to 2.5 Mbps, 640 by 480 pixels, 30 frames per second, Simple Profile with AAC-LC audio up to 160 Kbps, 48kHz, stereo audio in .m4v, .mp4, and .mov file formats
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However, I have successfully transferred 704x and 720x videos to both my 3G and 3GS. Of course, the iPhone can only display 480x320 onscreen. I convert to higher resolutions to use for other purposes, and don't want to keep additional copies of lower resolutions just for the iPhone.
I use Handbrake to convert files on Windows, and Handbrake and VisualHub (discontinued) on the Mac. Both have optimized presets for the iPhone.