Part 2
4) Set the Correct Compression and Resolution
On the 'Compression' tab next to 'Destination', click <Edit> to bring up 'Custom Encoding Settings'.
(Do not worry about the Video and Audio settings here. They will change to Custom following the next steps.)

On 'Custom Encoding Settings' click the tab with the Kbps on it. (Default should say 282 Kbps, but it might not. Regardless click that tab.
Under 'Audio format' choose 128 Kbps, 44 kHz, stereo CBR.
Under 'Video size' choose 320x240.
You should now see the tab say 637 Kbps as shown below. (If you adjust the settings such as frame rate and smoothness, the Kbps number will change. This is OK.)

Click <OK> and then click <Apply>
5) Start Converting Your Video Files to Zune Format
Click <Start Encoding> to begin the video conversion.
Enjoy your videos on your Zune!
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