I don't use Compressor but Vegas, Procoder and other converters have a H.264 preset for Ipods and Iphones. I make MP4s with Vegas and they look good on my Iphone. I also doownloaded a video of mine from you Tube and it looks great on my Iphone too.
You can use Keepvid and save as flash or MP4.
Hope this helps Danny Hays