what resolution is it? might be that the BB is having trouble resizing on the fly? size of the file as well as length - could be the BB choking on the data stream?
also have you checked the file in a pc to make sure it wasn't a bad rip etc. sometimes the audio can be ripped at a different fps than the video, the end result is a file in which the start seems ok, but the further you go along the movie, the greater the sync gap is.
i recently converted a couple of 30min tv show episodes (21min each) to mpeg-4 using an overall bitrate of around 600kbps, resolution of 480x240 or 480x360 depending if widescreen or normal. i've had no lag with file sizes ranging from 60 - 120mb per episode
oh and i'm using os 5.0.0.423
i use a free proggie called
xvid4psp... don't laugh it's quite powerful and is by far the best converter i have found to date, free or paid. i know it says psp in the name, but... its soooo good. if you want to try it, settings that work on bold are...
Format: MP4
Video Encoding: XviD HQ Ultra
Audio Encoding: AAC-LC ABR 128k
to change resolution, select video->Resolution/aspect, by default it's locked to aspect ratio so you only need to edit the first value (or 2nd if it's a super widescreen movie).
i use lanczos4resize as the filter. oh and cropping options are available here too.
try this proggie if u still can't get it to sync properly, i've had 0 problems with it for both my blackberry, older n95 and psp.
oh one last thing, the gui may have changed, i'm still using v5 and i just noticed they're upto v6