Wow, I can't believe I missed this thread!
I love video media on handheld devices, so naturally it was one of the first things I got running on my treo.
Since a majority of the things you will get from torrent downloads will be divx, I would recommend the PocketDivxEncoder. It also deals with other formats, and It's free! You can check it out here:
http://divx.ppccool.com/
They also have a pro version, which has MUCH better file support, and even makes files specifically for your treo, and allows you to rotate them

It only costs $5, so if you're into this stuff, it's the thing to get!
Good luck, and I hope that helps. Let me know how it goes
