I have a Zen 2Gb so my approach should work for your device if it suits your aspirations.
I opted for AVI format, and ended up creating my own profile as per attachment. It is set to always use fixed video bitrate of 800 and fixed mp3 bitrate of 128, use same fps as source and always be 320x240 output size.
In the main DVDFab program, make sure that in Common settings under DVD to MObile under Generic to set the automatic cropping OFF (otherwise a fight breaks out inside DVDFab over whether to stick with 320x240 or not).
The profile works with v184.108.40.206 and v 220.127.116.11 I haven't tried any other intermediate versions of DVDfab.
Save the attached xml profile into the profiles subdirectory under where you installed the dvdfab program removing the .txt off the end of the filename.
Then inside DVDfab, under Common settings, General, customise UI, choose DVD to MObile option group, new, select zen, and then add to options to display.
hope this helps
generic.zen.xml.txt (946 Bytes)