The Cruz devices support MPEG4, H.263, and H.264 encoded video. But this does not mean all such video will play on the units. There are other considerations to take into account because this is a mobile device with limited system resources. The T103/4/5 and T301 tablets support MOV and AVI playback, while the Readers do not, primarily because of the differences in hardware.
We recommend that you use a video conversion software with presets optimized for viewing on Android devices like SnowFox (paid product): http://www.snowfoxsoft.com/android-video-converter.html
Another popular conversion software without presets is HandBrake (free product): http://handbrake.fr/
If you already have a conversion software that you are comfortable with, the settings below may allow you to optimize your converted video for playback on Android. You may however need to tweak your settings for best outcome. Consult your conversion software developer's website for support in optimizing settings for playback on Android.