QUOTE(SNYder @ May 10 2005, 02:07 AM)
1) I noticed that, when right clicking on a video, it still gave my the "convert to" option. Sure enough, I can choose "convert to" and it will convert the video’s audio stream into whatever format I have chosen. And the first frame of the video becomes the album art for the newly created track.
Yeah, that is cool as heck. But it was also in iTunes 4.7, along with video support. At least for some videos, like you figured out.

QUOTE
3) Not much of a surprise, but it wont let me import avi's, and the mpg's that it lets me import wont play (guessing it only can play certain variations of mpg). Only QuickTime files that I have lying around my computer have worked so far.
Anything which quicktime can play natively (without resorting to a DirectShow codec) should work in iTunes. Although it probably does have extension limitations.
You might not have noticed it, but iTunes can organize PDF files as well. It can associate them with an album. They used this capability for the U2 promotion, by including all the liner notes and such in with the download as a PDF file.
The big new thing in 4.8 with video is not that it can organize and play video.. that's not new. What's new is that you can download video from the iTunes Music Store. Several albums have videos associated with them and when you get the album, you get the videos as well.
To try this on the cheap, check out the latest single from "Gorillaz" on the iTMS. The single is "Feel Good Inc". You can go to the iTMS, find the Gorillaz page, and click the "Video Single" link at the top of their page. It has the one song and 4 videos in that album. Buy the "album" for 99 cents, get the 4 videos along with it.
BTW, they're using "MP4" for the extensions on these downloaded videos. So the defacto extensions seem to be:
M4A/B/P = Audio
MP4 = Video + Audio