1. That specs are definately not to fast or big or anything, as the Archos can play 720p [email protected]
up to 5Mbs, so there has to be something else. Did you try from a sd card or internal?
2. Some people get to cute with the parameters in h.264 video and then the hardwaredecoder can't handle that, and that side states that the they are using a patented tech to deliver the best quality there is atm, which sounds like that.
As it is a britsh only service we can't really confirm that.
Are you able to upload a testvideo somewhere?