Handbrake preset for Xoom -- courtesy of Chris DiBona

It depends on the file. I did a lot of testing and found some great settings that have no skipping at all.

I recently encoded a handfull of movies for my Xoom, one being the new Tron Legacy movie.

I re-encoded a 1080p mkv file

these are the settings I used

Picture Settings:

Anamorphic: strict

Filters:
Decomb - default
Detelecine - default

Target size: 3900 (since the xoom can't handle files larger than 4gb)

Audio tab: remove all but one channel since you don't need multiple streams

Advanced:
Referenced Frames - Default (3)
Maximum B-Frames - 0
CABAC Entropy Coding: unchecked
8x8 transform: unchecked
weighted p-frames: unchecked

option string should be: 8x8dct=0:bframes=0:cabac=0:weightp=0

screenshots are...

http://img.exstatica.net/images/screenutu.png
http://img.exstatica.net/images/screenlsl.png

exported preset
http://www.exstatica.net/HB_Export.plist

If you use the exported hb settings make sure you still modify the picture settings as its not stored in the preset.