I remember a couple of profiles that I think were set up in this way, perhaps in iPod or PVP. I have converted exclusively to H264 for the improved image quality, but not all players support this. Post if you can't find it, I am still looking through the profiles in the new version; one I use a lot is gone missing I think.

//EDIT// Found it. It is the iPod.MPEG4 profile, the 4th one down in the profile list in the drop down box. Uses AAC audio.