Mplayer

Use this little script to transcode video:

#!/bin/sh
#http://jlime.com/mw4/index.php/Howto_video_player
EXPECTED_ARGS=1
E_BADARGS=65
if [ $# -ne $EXPECTED_ARGS ]
then
  echo "Usage: `basename $0` original-video.avi"
  exit $E_BADARGS
fi
mencoder -o /tmp/000video-track.avi -ovc lavc -oac pcm  -of rawvideo $1 # get the video track 
mencoder -o /tmp/000audio-track.wav -ovc lavc -oac mp3lame -of rawaudio $1 # get the audio track
mencoder /tmp/000video-track.avi -srate 24000 -vf scale=160:120 -o /tmp/000video.avi -oac mp3lame -lameopts vbr=0:br=24:mode=3 -ovc xvid -xvidencopts bitrate=50 -ofps 7 -sws 2 # convert video
ffmpeg -i /tmp/000audio-track.wav -acodec pcm_u8 -ac 1 -ar 8000 /tmp/000audio.wav # convert audio
ffmpeg -i /tmp/000video.avi -i /tmp/000audio.wav -acodec copy -vcodec copy `echo $1|cut -f 1 -d .`.small.avi # merge video and sound
rm /tmp/000video-track.avi
rm /tmp/000audio-track.wav
rm /tmp/000audio.wav
rm /tmp/000video.avi

scp it to your nanonote, and enjoy! :)