HD Format is very well liked by the online consumer base. I suggest doing anything with HD.

Ipod, all I can base facts on is by our sales.
With one site (Clips.com) we offer videos in:
MPG, WMV, Quicktime, and Ipod.

We've only ever had 1 download.

With several other sources, we have never sold anything IPOD related.

We did have a partnership with BCS Mobile in 2004-2007. It was actively promoted. Basicly, the site was similar to AEBN's mobile streaming solution. The consumer bought a package of minutes or tokens, the consumer could stream the videos by a ppm module or could buy tokens to download them. It didn't do so hot. In fact with all of the involved technology that went into it the site wasn't earning enough revenue. So after nearly 2 and a half years of operation, we shut it down.

I do know that someone did tell me once that if a video is a wmv or real player - a most common format, it could be used on the IPOD.

I wouldn't put your focus on IPOD, I would focus more on other downloads or streaming products.