*** Small-sized 2-pass re-encode of 720p for computers (PC, Mac), PS3 or Xbox, portable and mobile devices (Ipod, Itouch) . ***
*** Video is 480x272 H264; audio is 44.1 kHz/stereo AAC LC and container is MP4. ***

I can recommend CoreCodec for H264 (avc1, x264) video-playback, free DivX 7 for AAC sound-playback (and .mkv with AAC), Haali splitter (free, comes with CoreCodec) as the fastest and best combination for Windows Media Player. This is what I use.
VLC player (free), mplayer (free) and KMplayer (free) are available as alternative for all platforms (operating systems) out there and have BUILT-IN codecs and MP4 capabilities. But, video quality is approx. 10-15% lower, blurrier at least on system I have.
One can try CCCP matroska codec pack, where ffdshow codec/filter packs and Haali splitter comes in one package and support MP4 playback - but extra caution is required during the install process.
QuickTime of course, supports H264/AAC natively.
PS3 + HDMI cable + newer TV have been reported as best combination.
And please, do not watch it with a nose in the screen, take proper distance to the monitor or TV (as advised in TV manuals).Many of movies I encode have embedded subtitles. So far, only VLC player is able to use them correctly.

USE TORRENT-SEARCH SITES, TorrentBar extension for FireFox OR EVEN GOOGLE: show-name H264
(for example GOSSIP GIRL H264).

"Home" of my torrents (for Bookmark/Favorites in your browser)  
https://piratebayproxy.live/user/twentyforty

Interesting "Discussion" to follow:  
https://piratebayproxy.live/torrent/5191311/Cloudy.With.A.Chance.Of.Meatballs.PROPER.H264  
https://piratebayproxy.live/torrent/5190694/The.Bad.Lieutenant.Port.of.Call.New.Orleans.LIMITED.H264
Your comments and opinions are welcomed, good and the bad ones.