I USED to have a neat little system, whereby I was using QuickTime Pro as the encoder for all video files destined for my iPod 5G, since I could fine-tune the encoding settings (I HAD been using 512kb h.264 video, 96kb AAC-LC audio, baseline profile, single-pass). iTunes was only being used for transfer to the iPod. ONE (or more) of the updates I mentioned in my subject heading above completely changed that.
Now, only iTunes 6.0.2-converted videos will transfer (Advanced/ Convert Selection for iPod), meaning that often times, I have a confusing, disorganized video library with two separate encodings of the same file, and some times, I even have to do multiple encodings. I am HOPING I am not the only one affected, and that someone out there has a solution. I have tried restoring the iPod to 1.1 firmware, repairing permissions, and cleaning caches, all of which completed without error, but did not solve the issue.