What ffmpeg options should I use to make video playable on Android Phone (specifically, LG Optimus)? I tried various bitrate and codecs and all combinations I came up with doesn't work (tried theora, mpeg4, h264).
The reviews I've read seem to indicate that the Optimus will happily play standard-definition Xvid and DivX video files in AVI format so try using the "-vcodec mpeg4" setting.
No luck with avi mpg4/mp3 codec? Plays like a charm on my HTC Desire w/ Froyo 2.2 You could also try another encoder, "SUPER"  for example. IMHO "Rockplayer"  is the best player for the android platform at the moment.
Hope that helps.
I would highly recommend that you attempt the free MoboPlayer from the Android market.
It has highly optimised code for ARMV7, ARMV6 VFP, and ARMV6 -- as soon as it downloads it might recommend a different version from the Market version and will automatically start a download of the correct version.
In my personal experience video playback was exceptional on supposedly weaker phones -- although I don't expect it to handle HD content well.
These settings work very well on my ZTE Blade. As they have similar hardware (CPU & Memory wise) they should work OK for the Optimus One.
Video codec: x264 Frame size: 512*288 (you may want to finesse that slightly for the Optimus screen size - 320*480?) Bitrate: 768
Audio codec: aac Bitrate: 128
I suspect that the frame size, codecs (audio and video) and bitrates should be fine regardless of which container (AVI/DIVX/MP4/MKV) that you pick to play it through.