No H.264 playback on Sony Ericsson W850?

My new gadget, the Sony Ericsson W850, is able to play back video (in addition to being able to record video, take photos, play music, and only incidentally, to make phone calls). It has a 320x240 screen (same as gen-5 iPod), and according to its freely available tech specs, supports "MPEG-4 Simple Visual Profile Level 0, H.263, H.264 Baseline Profile Level 1". My experience though is that it can't play back H.264, at least it didn't play back anything I could produce. I tried both encoding a few minutes clip from a DVD using Handbrake, as well as converting another few minutes DivX clip using iSquint, and the results are the same with both: I tried every combination of settings in both programs, and the combinations where vanilla MPEG-4 is used result in a video file that plays okay on the phone, and the combinations where H.264 is used result in a video file that results in a black screen on the phone (although the audio plays okay).

I have to stress that I'm not saying the device doesn't play H.264. I'm just saying that several video files converted by the above two programs with H.264 option selected didn't play. I could've run into some profile capability violation or something similar - I'm not that much knowledgeable in video encoding. Some people say I should try experimenting with command line ffmpeg. Honestly, I won't. It's not that important, really. While I can find time to listen to music on the go, I really can't imagine I'll want to watch any video content squinting at the 2" screen. The ammount of time I decided to invest in this went only so far as to try comfortable GUI options, with motivation being "because it was there." If anyone has more success than me though, please let me know.