correct formatting for ipod nano 16gb 4th gen

Hi all,

just downloaded and tried out badaboom last night. Nice and fast but i ran into a small problem. I selected the nano when converting the video. When i uploaded it to the nano through itunes, the left side of the video is cut off slightly, and the bottom edge of the video has a blurring effect.

The video is still watchable since it's only a thin edge along the left side and bottom that's affected. but i'd still like to get it in the correct format.

Also, after converting, the file was actually bigger then the original. I would expect the converted file to at least be the same size, if not smaller, since it's being formatted for such a small screen.

So does anyone have any suggestions/directions for the correct settings to convert a video for a 4th gen nano?

thanks