If they specifically said H.264, that does not mean "MPEG-4 support". It means that it supports a specific subset of MPEG-4. "MP4" is just a file container, I could put Wild Monkeys in there and nothing could play it but Wild Monkey Player 3.1, and still call it MP4. They should also support other layers of MPEG-4 like Simple Profile and Advanced Simple Profile, and enable playback of Divx and similar streams. But they probably won't.
Don't get me wrong, some H.264 implementations are probably superior in quality bit for bit (for the same size in other words) to Divx/Xvid/WMV/RM/QT. But H.264 is the newest and least common MPEG4 layer, and I don't even know if there are any freeware encoders for it.
Edit: On top of that, I hope Sony is hardware accelerating their playback or has a really well tuned decoder. H.264 playback at higher resolutions can get pretty CPU intensive.
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