Apparently yes- as long as it complies with the supported formats-
but when Apple decides to change their store content is another story. I'm assuming the hi-def thing is part of the hold-up, honestely.
(From Apple's site)
Video formats supported: H.264 and protected H.264 (from iTunes Store): 640 by 480, 30 fps, LC version of Baseline Profile; 320 by 240, 30 fps, Baseline profile up to Level 1.3; 1280 by 720, 24 fps, Progressive Main Profile. MPEG-4: 640 by 480, 30 fps, Simple Profile