I've had success using MPEG Streamclip to convert RTV 5K files to 320x240 H.264 without any preconversion to standard MPEG2, though I'm strongly considering Video ReDo to get rid of commercials (I find it tedious trying to skip them using the iPod's wheel).
Bear in mind that you'll need QuickTime Pro and the QT MPEG2 plugin or an appropriate version of QuickTime Alternative to use MPEG Streamclip. Details at the Squared5 site above.
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