Goes to Lazyboot. This FFMPEG creates a suitable MPG file for use in the finicky GypPlay.
ffmpeg.exe -y -i <input file> -target ntsc-vcd -s 352x288 -vf "scale=352:-2, pad=352:288:(ow-iw)/2:(oh-ih)/2" -vcodec mpeg1video -b:v 1150k -acodec mp2 -ar 44100 -b:a 192k <output file>
Awesome! Better than using Sega Movie Creator, IMO.