With the 2.00 firmware update, 1080p support was added, but some converted movies are still not playable, not even in 720p. What is the maximum bitrate supported by the PS Vita's video player? I use HandBrake for converting my movies to .mp4 files.
The resolution (1080p, 720p) has nothing to do with the bit-rate directly. They are two different things. The Vita doesn't have an HD resolution display, so it has to down-scale HD video in order to play it. All that the 2.00 System update did is add the ability to down-scale H.264 1080p video to fit the Vita screen. The Vita never had the ability to play all .mp4 files. An .mp4 file is just a container. The video in it can be encoded in dozens of different ways, and only a few of them will play on the Vita. Using generic pirate software like Handbrake isn't guaranteed to create Vita-compatible video files. The files have to conform to the H.264/MPEG-4 AVC Baseline, Main, or High Profile Level 4.0 formats in order to play on the Vita if they are in 1080p mode. No other 1080p MP4 files will work. The bit-rate is irrelevant.