2048x1536 videos and best compression strategy

Hi,
I can't quite figure out if DPS on the iPad3 supports palyback of videos in 2048*1536 resolution. Should I stick to 1024*768 even for the 2048 rendition?
The cover of our magazine includes a full-screen video that features animated text. I'd like it to stay as crisp as possible, but had an error message pop up when tried to play a 2048*1536 video. Playback of a 104*768 video works just fine, but I find the text somewhat pixelated, especially after compressing it to mp4 (I exported from AE in Quicktime format using the Photo - JPEG codec, and then compressed to h.264 in media encoder)
The second part of my question, which I realize may not really belong in this forum but rather in the After Effects or Media Encoder forrums, is what would be the best rendering and compression strategy to keep the type as crisp as possible, especially if 2048*1536 is indeed not supported?
Thanks

1536x2048 will not render on a iPad3 this is something programed in to the video play back on iOS basicly it only supports up to 1080 which is 1920x1080 and it really is just the 1920 we have to worry about anything over that does not play. So this is what I do with my full screen videos on the iPad3 I scale them to 90% of 1536x2048 which is 1382x1843 which plays just fine with no noticable loss in quailty.
Here are the sizes I use for full screen videos on iOS devices.
iPad3 - 1382x1843
iPad1&2 - 691x922
iPhone4 - 576x864
iPhone2&3 - 288x432
The second part of your question I can help answer but I am no expert on video encoding I will just sure the settings I use.
Video
Format: H.264
Frame Rate: 30
Field Order: Progressive
Aspect: Square Pixels (1.0)
TV Standard: NTSC
Bitrate Encoding: VBR, 2 Pass
Target Bitrate [Mbps]: 8
Maximum Bitrate [Mbps]: 8
Key Frame Distance: 72
Audio
Audio Codec: AAC
Sample Rate: 48000 Hz
Channels: Stereo
Audio Quality: High
Bitrate [kbps]: 320
Precedence: Bitrate
Multiplexer
Multiplexer: MP4
Stream Compatibility: Standard
Hope that helps.

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