Apple's QuickTime is doing very well these days, as evidenced by the brisk sales of QuickTime Pro licences at the Apple Store. Right now, QT 7 Pro for Mac OS X is third on the list, and QT 7 Pro for Windows is sixth. Certainly, a significant part of its recent success can be attributed to Apple's inclusion of both MPEG4 and H.264/AVC video support in its newest iPod, which also happens to be the number one seller at the Apple Store. QT 7 Pro offers the user the ability to export video from various sources to various different formats, and includes an "Export Movie to iPod" option for iPod-compatible 320x240 H.264 video.
However, if you are looking to save some money, a number of free H.264 encoder options do exist. These include x264, which is used in ffmpegX and Handbrake, as wll as Michael Ash's excellent and free app, QTAmateur, which allows access to Mac OS X's built-in QuickTime export features (including iPod H.264 support) without the need for a QuickTime Pro licence.
By the way, Apple's description for the iPod in the top ten list is wrong. None of Apple's iPod models support Firewire now. While both the iPod nano and the iPod can charge over Firewire, there is no longer any support for Firewire file transfers or music synching.
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The release of QT 7 is probably a large part of the jump in sales, but even when QT 7 was first released, AFAIK QT 7 Pro Mac licences didn't go this high on the Apple Store top ten list. Furthermore we are at QT 7.0.3 now... QT 7 has been out for the Mac for quite some time. (QT 7 for Windows is newer though.)
Thus, it's likely the release of the new iPod has a lot to do with current QT Pro licence sales.
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