Okay so after playing around for several hours and reading other threads. I finally got movies working on my 8100.
You need QuickTime Pro in order to convert the video.
Open up the video you want with QuickTime Pro.
Go to File>Export
Export: Movie to 3G
Now go to options>Video
File Format: 3GPP (MobileMP4)
Video Format: H.263
Data Rate: 256
Image Size: 176x144QCIF
Frame Rate: 30
Key Frame: Every 24 Frames
Select okay>Save
Once the video is done drag the new file to you SD card. And it should be good to go.
Post up if you can improve this. Seeing the controls work rather slow while viewing on the BB.
If you manage to get it set up correctly, you can just right click on a file and convert it.
When the script is actually running you won't see anything happen but a little "Run Script" animation in your menu bar. I'll take a screenshot of it so you can see what I mean..