nook hd 7"

i recently bought a nook hd 7" , and a 32 gig sd card. using any video converter i can convert 720p MKV format movies and it works flawlessly
[ using the amazon kindle hd 7" auto settings ] [ so far the only videos that work are mp4 format ]
i tried to convert lower quality videos [ xvid , avi , wmv , mp4] around dvd quality using any video converter it comes out blocky/ watchable but the frame rate drops .
can someone post the best customized mp4 settings for my nook hd ???