Correct. But with a phone with a 1ghz processor, anything above 3000kbps is going to slow it down. My old computer with a 2.5ghz processor cant handle anything above 3000kpbs. Plus the sd card cant even read that fast. And anything above 2000kbps you are not going to notice the quality difference on a 4.3 inch screen.
I think we're on the same page in principle, although I will mention that processor clock speeds are no longer an exclusive basis for determining real-world performance, especially when comparing against difference use-case scenarios, operating systems, and processor architectures. Things like the overhead of Windows, and specific media/HD hardware acceleration and instruction set enhancements can result in significantly different performance results -- at any rate, I've successfully played back 5+ Mbps 720p video on the Evo with no framerate drop so the Snapdragon can definitely handle it.
You are right on the SD card -- depending on the SD card class. I use a Class 6 card, so there's plenty of read speed, but one's mileage will vary given the card in use (in theory even a Class 2
should be able to handle the 6 megabit per second max bitrate, since that should still be well under the Class 2, 2 megabytes per second read rate, but that will depend on the condition of the card, fragmentation, etc., so all bets are off).
Lastly, I would agree that on a 4.3" screen with a 480x800 resolution, that high of a bitrate is not relevant. Better yet, 720p isn't even relevant, there's just not enough resolution on the display to take any advantage of it, so it would be best to downconvert to a 480p resolution for exclusive playback on the Evo. However, for outputting over HDMI to a TV, I would say that 720p is beneficial and so is using the highest bitrate available (given the processing and space constraints of the Evo).