I've got to say, h.264 is an amazing codec; I've experimented with a wide variety of settings in XviD, DivX, Sorenson, and h.263 over the past couple years, and h.264 is so much better it's amazing. Sure, the encode times are monstrous, but name a distribution codec for which they're not (and nearline codecs like DV don't count--they're for an entirely different purpose).
On the positive side, I can encode at speeds roughly a quarter realtime on my DP2.0 G5, which isn't all that bad, particularly for 2-pass encoding (which is a must unless you're doing CBR streaming). I don't think it's much slower than a good-quality XviD encode using ffmpeg, for example.
One quality note: QT Pro, if that's what you're using, is terrible about properly deinterlacing video before recompressing, which may account for poor quality. If it's from a DVD Handbrake does AAC/h.264 .mp4 with little hassle, otherwise make sure to set the proper flags in the movie's properties flag, then set it to the correct size there (not in the export section), and finally to manually set the framerate in the h.264 properties; if you do all that, it should deinterlace the export.
[Edit: I totally forgot to mention this, but QT7 is available for both Windows and Mac now, and VLC (Win, Mac, Linux) plays .mov or .mp4 files with AAC sound and h.264 video just fine, so cross-platform support isn't that much of an issue at this point, so long as someone is up to date with their software and has a reasonably fast computer, both requisites of playing most video anyway--keep in mind that neither Windows nor the MacOS will play XviD video out of the box, either.]