I too was having video playback problems on the MediaDroid50h and MediaDroid85h using FLV-h264 video. Strange flashes to black and restart issues. Then, I decided to try a simple mp4 with an h264 codec and voila! PERFECT playback. I think the MediaDroids have an issue with the flv-h264 hardware acceleration and end up choking. This is how I am creating perfect video playback:
My screen division for playback is: 1280x640
Create video as follows: Make your video the same aspect ratio as the 1280x640 canvas but a smaller ratio - 950x475 using MP4-h264 at 2400kbs data rate. When added to the screen division, it will will the zone and play back perfectly.
So, to recap: the MediaDroids don't seem to like the flv-h264 format but do just fine with an mp4-h264. PCs seem to be fine with either format but can use the hardware acceleration fine with the flv-h264.
Hope this helps!! After I got all of my glitchy issues worked out with MediaDroids, the units are performing exceptional!!!