I've dedicated several articles (latest one HERE) to converting videos into MP4 (M4V / MOV) files so that they can be played back by the H.264 decoder of even older-generation iDevices. In the current one, I elaborate on how how you can play the output files with the built-in, stock Videos application. This article also belong to my Multimedia article series, in which I plan to publish a “Streaming multimedia over your local Wi-Fi” in the next few days and, then, finally, the real Multimedia bible.
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