This guy takes a look at the video available from iTMS.
At regular size and even in the little window embedded in iTunes, it looks crystal clear, with no noticeable or distracting artifacts even in fast moving scenes with lots of action. At double normal size, you will start seeing a few artifacts, comparable to the compression artifacts you’ll see when watching shows recorded on popular PVRs like TiVo and ReplayTV. Full-screen is much more like watching a VHS tape. Actually, it’s more like watching an old VHS tape that has been watched one too many times. … The episode weighs in at 198MBs.
Interesting. I wonder what codec they’re using. The file size seems a bit on the large side, since a good quality XviD encode of a 1 hour TV show usually runs 350mb at around 900kbps ABR. I’d expect 45 minutes of QVGA to weigh in around 150mb at 400kbps ABR. Maybe the audio is encoded at a higher quality? This guide to DVD-to-iPod ripping suggests using 48khz AAC @128kbps, which seems high to me – I’d go with 44.1khz 112kbps AAC, or 128kbps ABR MP3.
The episodes are protected by FairPlay, of course, so it’s kinda hard to see what’s really in there. I hope someone cracks that soon.
On a similar note, I fiddled with trying to get video into iTunes, and did not meet with success. The iPod is supposed to play MPEG-4, but perhaps it has to be rewrapped in a MOV instead of an AVI. This stuff has got to happen automagically for this to really take off.