H.264 and QT 7.0.3 vs QT 7.0.4

This is an alert to all who have been frustrated with making H.264 movies for the 5th generation iPod video.
iTunes will play movies the iPod won't. The iPod is more picky in what it can play. In particular, the iPod requires an .mp4 encoded with H.264 to be encoded with "restrict Profile to Baseline."
Unfortunately, it appears that QT 7.0.4 breaks this! QT 7.0.3 works, QT 7.0.4 does not.
We encoded the same test file on machines running OS X 10.4.3 and QT 7.0.3, it worked. Encoding under OS X 10.4.5 and QT 7.0.4 does not.
Feedback has been sent to Apple.

Just a bit more information about this:
Updating to QT 7.0.4 has resulted in movies encoded with H.264 for the 5th generation iPod (video) no longer being able to load. These QT 7.0.4 encoded movies play in iTunes, but generate the error when trying to load onto the iPod.
QT 7.0.3 does not have this problem.
Something has been broken in the QT 7.0.4 upgrade.
My guess is that QT 7.0.4 is not correctly using the "Baseline" profile, required by the iPod.
That it no longer works has been confirmed using several machines and several iPods. When encoded in QT 7.0.3, it loads on the iPod just fine. When encoded in QT 7.0.4, it does not.
This is using the Movie to MPEG-4 settings (not the Movie to iPod (320x240)settings, which create huge files - not good for server space or download time).
We used the following settings in all our tests:
Export using QuickTime Conversion
Format: MPEG-4
Options:
File Format: MP4 (NOT ISMA)
Video Settings: Video Format: H.264, data rate 75
Image Size 320x240 QVGA, 15fps, Key frames automatic
Press the "Video Options" button and set Restrict file profile to "Baseline" (NOT anything else)
Encoding Mode: Best Quality (Multi-pass), hit "OK"
"Optimized for Download" is no longer grayed out
Audio: AAC-LC (Music), Data Rate 48
Channels: Mono, Output Sample Rate: 44.100 KHz, Encoding Quality best
When done in QT 7.0.3, it works fine.
When done in QT 7.0.4, it will not load onto the iPod.

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