Ok so this is whats up... I am pretty computer savvy, however I'm kinda new to the video mp4 scene.... So this is the problem:

Im converting my dvd to play on my psp:
my settings are as followed:
mp4(h264 + aac)
resolution is 480 * 272 (psp screen res)
Bitrate 450
Audio 128

ok well these work without a hitch, and its the perfect setting however I wanted to add the final touch so that the movies look great on the TV as well from using my psp connection so I set the Encoding method to high quality (dual pass) which has made it the best (thank god for acc)-- well I did a couple movies then the update 4.0.5.5 and now I can do one pass without a problem but the second pass fails every time.... I would like to use the high quality due to the problems with acc and red and blue colors (they pixel without the second pass) -- so wtf is up? anyone else with this prob?

I use the psp.h264.firmware3.30+ with a frame resolution of 720X480. Looks great on the psp and good on the TV, at least good enough for the kids. And I only use 1 pass. Saves a bunch of time too.

I use that same setting, but with the second pass its so much clearer, and I don't mind the wait, but heres a question, does the 720x480 fit the psp screen without playing with the zoom? I use to use another selection but I found my current settings the best expecially with the dual pass...

No, the original size is pretty small, but zoom doesn't hurt the quality too bad. Looks pretty good on the big screen when played on the PS3. Another thing I like about it is you can put 7 or 8 feature length movies for the kids on one single layer disk, that will keep em' busy a while.