This seems to be a hardware limitation. Tegra 2 does not support high profile h.264 decoding from what I have read, and 99% of what is available for download is high profile. Its not exactly clear what Tegra 2 does support, but we know it supports baseline profile which no one uses. Basically, you can't just dump videos on here and know that they will work, which is beyond dissapointing seeing as though my Epic4g supports high profile h.264 and plays anything i throw at it.
I sure hope that this is remedied or that I am completely off base, because if not then I will have to wait for a competent SoC to be released before I can switch to an Android tablet.