Alrite after playing with the video for a few more day.
I STILL don't get exactly what I wanted...and I notice alots of people viewing this thread, so I'll share what I have at the moment.
Right this moment, my best conversion is...
original as input/ since no TV-out, it is suggest 640x480 up to 720x480.
Always try to maintain the same or near framerate as the original video clips. To see how many fram per second the original clip is...right click on the video clip and choose properties > Details > Frame Rate.
either Auto or 16:9.
2 Channels Stereo
NOTE: I can't be sure if its just my phone in particular, I've only gotten it for a week. I don't wanna think that it is my phone that don't play video perfectly. However, the setting above allow me to play full screen with no frame skips, hi quality, almost everything is perfect with 1 exception.
The frame don't skip but it seem to lagg a "LITTLE BIT"... an example, you won't see black strips or shifting from 1 scene to another, but rather.....crap i can't explain it lolz