As of version 7.1.3, QuickTime’s built in Export function, Movie to iPod, now uses 640 x 480 (instead of 320 x 240), just like the videos available through the iTunes store.
One other good point is it now respects the source file’s frame rate. I can’t remember for sure, but I think QT 7.1.0 automatically set the frame rate to 29.97, even if the source had a frame rate of 15 or 24.
Unfortunately, Apple still doesn’t give us any options when using this setting, like changing frame rates, or quality levels.
found via MacOSXHints