This may have shown up in the 50+ pages of comments, but I don't really feel like reading all of them, so...

ffmpeg -i "${input_file}" -f mp4 -vttc mpeg4 -maxrate 1000k -b 700k -qmin 3 -qmax 5 -bufsize 4096 -g 300 -attc aac -ab 192 -s 320x240 -aspect 4:3 "${output_dir}/${output_file_name}.mov"

This distorts a video if it's not 4:3 to begin with. I found a fix for this, modified some values to get them to work on my system, increased the bitrate and took the size up to VGA (which is supported on newer iPods), and put it on my website, an.omalo.us (link). I'm not pasting it here, because I want to retain the ability to modify it if I find a bug. If you find a bug, please post there and I'll fix it.

HTH.