As well, many (including myself) have had bad experiences with the included software, and as well would like something a little more simplistic. In addition to this, it is hard to find the software that they have on their website, as the site seems to be out of content and Godaddy has the site reserved. So without further delay here we go!
Step 1: Windows Media Player (and How It Can Be Useful!)
Step 2: Video, the Easy Way!
1.Choose the file to encode
2.Choose the directory to output the file to (NOT the Zvue, as it will take a lot longer!)
3.Choose video options (Quality, etc... Dimensions is where you can set the resolution to 160x120)
then just let click "Encode Now" and then kick back and wait for it to finish (it took about half an hour for Something Something Something Dark Side to encode). Then all you have to do is then drag and drop the video to the "Video" folder of your Zvue. Just make sure it has the room for it, and if you are needing to improve video quality or shrink the file (by decreasing Video/Audio quality).
I hope this all helped, as this is a rather good device for the price i paid ($50 at the local Bargain Store), but it is a shame that the company that made it has pretty much abandoned it, and has pretty much abandoned the consumers who purchased this product. I hope i have helped some people who have been searching frantically to make this device work to its potential. Enjoy!