Played around with ffmpeg a lot the last days and got something
that basically works. I used neko_ffmpeg-SVN-r6775 on my O2k
ffmpeg -y -threads 4 -i somefile.mpg -target pal-dv -s 720x576 -aspect 4:3 outfile.dv -padtop 86 -padbottom 86
Input file has a 1024x576 DAR.
It produced a file that plays perfectly via the Video Out on my O2. Seems that hardware decompression is used
The quality of the DV file is not optimal, it's rather blocky. I'm about to do some tuning to achieve better results.
A shell script to automate things is also about to be written...
Next step is to produce a file with Quicktime Container and PhotoJPEG compression which can be played back