Your best bet might be MPEG-2 playing out via FLC 0.8.4. However the G4 processor in PowerBooks today are pretty anemic for HD playback. Could you use a Wintel box, or maybe DVI out of a iMac G5 17″?
What are you encoding with? I’ve made my best Flash using Squeeze 4.2 with the On2 plugin. Not much HD work so far, but you definitely want to tell it to go slower and higher quality, and up your bitrate.
Flash really isn’t meant for HD delivery as far as I can tell. WMV is a much better format for that.
WMV is much more efficient than MPEG-1. A good starting point is 320×240 @ 400 Kbps, 2-pass VBR (assuming you’re coming off a web server). WMA Standard audio @ 96 Kbps 44.1 stereo.
I’ve been using Rhozet Carbon (Pro ProCoder) for my HD MPEG-2. However, it only does .ts files with MPEG-2 Layer II audio. If that’s not a problem, it’s probably perfect for you.
If you want to control your own DRM, the only other viable solution is Windows Media, which will be compatible with pretty much everything OTHER than Mac and iPod. Lots of cool portable devices that support it, and Windows itself of course.
I’ve tested the Inlet product extensively, and can verify that every WMV I’ve made with it had perfect compatibility in every player I tested that should have worked.