OK - I have things working, but it makes no sense.
I re-ripped one of my movies using the iPod hi-rez setting. Dropped it into iTunes. Synced. It worked.
Then I added an image to it, resynced and it failed again. BUT one of the other movies I made no changes to suddenly reappeared.
Now it seems that I can add the movies - but it takes a couple of syncs to get them to show up. But once they are there - they are there.
It works - but not as well as I expect an Apple product to.
Hopefully the next iOS update fixes this.