[Q] Best Ripped Video Resolution for Captivate, Format, Etc

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What is the best Video format and all the info for it for Captivate? I have messed around with handbrake and a few other converters and am really not sure what the best format is.

I am thinking of ripping to MPEG4 (.mp4) but I want to get the maximum resolution for the captivate phone screen. I have read that it does 720p which is 1280 x 720 resolution if I am not mistaken? Then what bitrate? How about the audio? I know that the captivate supports 5.1 but only through headphones correct? So here is what I am thinking:

Ripping MP4 at 1280 x 720 resolution
xvid
2500 bitrate
Audio AAC 44100 at 128KB 2 channel

Will this work and is this the best resolution? I am going to be mainly ripping DVDs and converting them to watch on my phone.