iPod QuickTime Baseline Profile Mystery

So I’d thought I’d share the results of my attempt to create perfect podcast video compression. Perhaps some can benefit from it, others might see a flaw and point it out.
The goal was: create a process to compress QuickTime video so that 1) It works on 5G iPods to iPhones, 2) It uploads to YouTube and other sites and converts to Flash video fine, and 3) has a decently small file size.
Now, if you want just 1 and 2, then there is no problem. Just export from iMovie, Final Cut, QuickTime Pro or just about anything using the “iPod – Medium” or “Movie to iPod” setting. In my case, I get 640×360 video that works on all iPod devices and uploads to video sites fine. In addition to setting the video compression to h264, the “Movie to iPod” setting will restrict the video to a “baseline profile”. This is critical for iPod playback. It will also restrict the number of bytes per second to a certain amount to allow for iPod playback.
But the file sizes are huge: usually about 50mb for 5 minutes of video.
You can control the settings of a QuickTime export quite a bit: limiting the number of bytes per second, frame rate, audio rate, etc. By doing that, I can end up with a 20mb file that is about the same quality as the 50mb one.
The problem is that in order to do fine-tune these settings, you need to forget about the “Movie to iPod” setting and create your own custom setting. There is no way to change anything once you select the “Movie to iPod” setting.
OK. So to simulate the “Movie to iPod setting, you choose to export as “Movie to MP4” as a start. Then select “H.264” as the video format. Here you can set a custom video rate as well, and a frame rate, and audio settings too. There is an addition button for “Video Options” that you must choose and set “Restrict Profiles” to “Baseline” — this gives you the baseline profile that you need to play on an iPod — or so you would think. You also need to select “Single-pass,” apparently. And, of course, you need to restrict the data rate to something low, like 500 kbits/sec or less.
But what you get when you do this is a movie that will play on an iPhone, but not a 5G iPod. It won’t transfer to it — iTunes claims it won’t work on the iPod.
As far as I can tell, there is no way around this, at least not with iMovie, Final Cut or QuickTime Pro. The “baseline profile” just isn’t set right for 5G iPods. You are stuck exporting as “Movie to iPod” and having a large file.
I did find one solution. I downloaded select freeware/shareware apps until I got to ffmpegX. This handy little video compression tool allows you to first choose “iPod H.264 640w” as a preset. But then you can change some of the settings. I was about to then restrict the data rate from 800 kbps to 400 kbps and set the audio to a lower rate as well. I was also able to lower the frame rate, though I chose not to. I exported, and got what I wanted: a .mp4 file that is small (20mb for 5 minutes) and works on the iPhone and the 5G iPod.
So it is possible to do this. The question I have is why doesn’t QuickTime allow you to customize your settings like this for an iPod video movie? At the very least, the “baseline profile” setting should work for all iPods, not just the iPhone.