The profile and level is the conformance point of MPEG-4. A given player will support a given Profile (what tools can be used in the codec, like B-frames) and what Level (maximum values of parameters like resolution, frame rate, etcetera). So, basically, you have to pick your player, and then figure out what tools make the best files for that player.
MPEG-4 today doesn't offer compression as good as the propritary formats. This should change with MPEG-4 Part 10/H.264 next year.
Anyway, if this is a funded project, I'd love to pitch my consulting services on it!
As for Jeff's review, I only saw what he said about the first few chapters. Did he ever review the rest?
My Book:
http://www.benwaggoner.com/books.htm
Cleaner e-book:
http://www.ebooktech.com/shopping/shopexd.asp?id=279
Cleaner Tutorial:
http://www.saferseas.com/navseries/adclean.html