I am trying to send a request to Droid developers to fix the Baseline H.264 video decoder implementation. Currently the Droid does not play baseline video correctly. Baseline H.264 allows reordered P frames which the Droid does not support. It supports reordering of P frames only when the H.264 video is Main profile. This bug for Baseline profile needs to be fixed asap to support a wide variety of baseline video.
Note that iPhone 3G and 3GS does implement Baseline H.264 correctly.