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i use Badaboom since my Nvidia GPU accelerates the encode. I just use the iPhone profile since the Pre and iPhone has same screen resolution (480x320). I'd aim for 900Mb-1Gb if we're talking 2 hour movie - looks awesome. You could drop the bitrate, but not me, i'm somewhat of a quality freak - macro blocks drive me nuts, even on a small screen. Really wish the Pre had more internal memory since I've transcoded so many movies to smaller size!
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