I just upgraded to the Video iPod and purchased some videos for it from the iTunes store. They don't have much yet, but there is some rare stuff in there, such as "Last Perfect Thing" and "Never" by Wire Train, "Come With Me" by Translator, some Psychedelic Furs, Fixx, etc. Hopefully they'll get more rarities soon!
And yes, videos look great on the iPod!
"Words like conviction can turn into a sentence"