As with many cellular and portable devices, encoding video can be a real pain in the ass. In order to maximize video playback time and quality while reducing battery-sucking CPU overhead special video formats are used. In the case of the E1000 the primary formats are MPEG4, 3GP and RealVideo.
Files created for the E1000 vary in size depending on the bitrate you use to encode the video.
Consider your running time and the size of your memory card when encoding. A good rule of thumb is that one minute is one meg at 128kb/s. Naturally if you double the bitrate you get half the time.
The E1000 usually includes a 32MB TransFlash card, and the phone has about 18MB of usable internal RAM, so
A major problem with encoding software is that the people who make it want money, and more money. It starts at the top - the people who define the standards (3GP, MPEG) want money for they work in creating the standard, the phone companies want money for the tools you need, the RIAA and MPAA want money 'cause they know all users are pirates who aren't making their own content but stealing from the big studios, and finally the people who make the useful software want money because it took them most of a weekend to code the program and they know you can pay it 'cause everyone with a mobile phone has money to burn.
Most applications cost money or are crippled in some way. The software that comes with the E1000 (PhoneTools) is user friendly to the point of being useless. Other apps do a much better job with lots of tweakability, but they cost money and/or offer crippled demo versions.
ImToo 3GP Convertor is a great little piece of software, but it sells for $29 and the demo limits your videos to five minutes in length. If you try and convert a video longer than that it will cut it off at the five minute mark.
The PhoneTools application is very user friendly, and by that I mean your grandmother can figure it out, but if you're any kind of power user its lack of customization options will make you insane. It will encode and transfer videos to the phone at bitrates so low (40kb/s) they're nigh unwatchable, and you can't change this setting. As a bonus however it will allow you to encode to different bitrates and formats and save these files to your PC - but they're not compatible with your phone. Whatever you do don't believe the quality of videos created by this program are as good as it gets - your E1000 can do a LOT more.
Microsoft's WMEncoder will encode to WMV, however it should be remembered that a lot of programs (such as the very useful vdub) face being sued into dust by Microsoft if they dare produce free software that can utilize or convert .WMV files (or ASF).
(if you've used it, add your comments here)
This is an excellent little app that creates 3GP files for many mobile phones, in addition to MP4 files for Sony's PlayStation Portable. It does not, at first glance, seem to work with the E1000. Using either the normal or headerless transcode methods results in a file that the PhoneTools transfer software doesn't recognize. If you copy it over manually (drag from an Explorer window onto the PhoneTools Mobile Explorer) the headerless file (which can be any size) will only play for five seconds. The file encoded with the header will only play for five seconds, but the filesize will usually reflect the length, it won't be a larger file.