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Do you have a file manager installed? Then you just navigate to that MP4 file and launch it, it should give you the option to either use the stock media player or your Meridian to play that video.
ES File Explorer is a good file manager, which also launches the media player...
With the size of the screen on our Droids, it's almost pointless to go much higher than 480 x 300, maybe up to 524 x 320 or something, higher than that won't really be that much more detailed on such a small screen and only increases the file size unnecessarily...
I can see if you're talking about an LCD monitor or HDTV, but not as important on a smartphone screen....imho
Optimal H.264 video settings for Droid are 848x480 at a bit rate of 1500 or less. AAC, 128-160k, 48kHz, Stereo. Wrap it all up in an MP4 file, and you're good to go.
The Droid's screen is 854x480, but 848 is the more common standard in video. I've never tried a video with an 854-wide image, it may or may not play.
Your file should play using the build-in Gallery app, basically because just about any player that is out there uses the same internal code and hardware that the Gallery app does, so if the file does not play in one, it will probably not play in the other either.
H264 is a broad format, it has a lot of different advanced settings like "level" "cabac" and other options that affect playability on a certain device, and as of such, a file encoded for a PS3 or XBOX360 might not play on the Droid.
In general, a file encoded using an iPod/iPhone-compatible conversion tool with a maximum of 854x480 (full res does play) 1500kbps video and 160kbps audio will play, however, certain conversion tools do not set the ID level properly, which results in no video.
Since your file doesnt play, you'll probably have to re-convert your file to proper Droid format. Have a look in the F.A.Q. for more information on that, or browse through the posts in the audio/video section