When you upload a video to Bits on the Run, our system optimized your video for playback. In doing so, it creates a couple of web-optimized versions of your video with appropriate size and format(s) that ensure playback across all browsers and devices. This process is called transcoding.
By default, transcoding is setup to make video playback just work, providing high quality video without creating unnecessary transcodes. In general, our system is designed to take care of this for you. However, it is possible for you to customize this process, using the tools in our dashboard.
First a quick overview that define transcoding terminology. When a video gets uploaded, the Transcoder creates one or more Transcodes of an Original video, using the transcoding Templates to provide the settings.
These Transcodes are copied to our webservers and then used to either Stream the video in a Bits on the Run player or to Download the video for playback in a third-party player. Here's a diagram that outlines the flow:

The behavior of our transcoder can be changed by editing the list of default transcoding templates in your account. This list can be found in the dashboard, under Account » Properties » Templates.
By default, an account contains 4 templates for transcoding originals to an MP4 format. These templates create transcodes that are respectively 320, 480, 720 and 1280 pixels wide. Additional templates can be created in the following formats:
For audio uploads, the transcoder creates a single AAC transcode by default. Additional audio templates can be created in the following formats:
There remains one additional, special-case template we call the Passthrough. It can be used to directly copy your original video to our webservers, without transcoding. This is useful for re-downloading your original video. The Passthrough template can also be used to stream your original video.
In the templates list (Account » Properties » Templates), click a template name to see its properties:

Next to the Name (choose wisely), the following properties can be edited:
The encoding gurus amongst you will miss properties like audio/video bitrates or keyframe intervals. We choose not to offer these, since tweaking them can break compatibility with certain devices or our adaptive streaming technology. We constantly monitor and optimize our video quality across a wide range of content types, ensuring each transcode has the lowest bitrate possible without showing any compression artifacts.
Note that every account has two default templates, one MP4 and one AAC, that are unique. In order to ensure that every upload results in at least one transcode, these two templates are always built and cannot be deleted.
When at least one transcode of a video is created, the video is ready to be published. This can be done through the Embed buttons, in either the videos list or the video properties page. The video is then published in a Bits on the Run player, which will automatically use all MP4 transcodes of a video (or the AAC of audio) for streaming playback.
It is also possible to publish individual transcodes of your video as a download. Therefore, go to the transcodes list on a video's properties page:

The transcodes that are ready have a yellow publish button. Click it to get an overlay with the download link and a save as button (to directly download to your desktop).
If a transcode is not built yet (e.g. if the template was not set to automatically build), you can do so by clicking the green add buttons. The transcode is then set to be in progress, which may take some time (roughly as long as the video is).
You can also delete individual transcodes, e.g. when they're not used anymore (FLV transcodes?). Like with templates, the default MP4 or AAC one cannot be deleted. This is visualized with a grey lock.
Note you can also publish downloads of multiple videos by grouping them in a playlist and then publishing the playlist as RSS feed. See our iTunes or Boxee tutorials for more info.