Yes you can. Just convert it to .mp4 with AAC audio using Quicktime, or if it is from a DVD Handbrake, or Videora, if you have a PC. There are other ways to do it too.
its actually m4v not mp4 (which is an audio format)...and what you do is in quicktime, go up to 'file' > 'export' > choose the ipod setting in format, and then save it to the ipod...there's your big tutorial
I meant when you export it in Quicktime, make sure to hit 'Video to iPod' which is m4v format, sometimes people confuse it with mp4 which is the audio format in iTunes.