Forget about futzing around with Handbrake or MediaCoder settings, get the free application: "DVD Catalyst Free for Droid Incredible" -
Free Stuff | Tools4Movies, the official home of DVD Catalyst (the Incredible has the same size screen, in pixels, as the Evo).
It couldn't be easier to use.There are no options or settings. You just drag and drop the video you want to convert onto it and click the button to start it converting. It works perfectly every time!
In fact, I've been so impressed with DVD Catalyst that I went ahead and purchased the commercial version even though I didn't need to (I wanted to support the developer).
BTW, one thing I did learn before I discovered DVD Catalyst is that in order for a movie to play on Andriod (at least out-of-the-box Android), the video must be encoded in h.264 base profile (whatever "base profile" means -- I don't really know).