If people are interested here are instructions on how to build the DVSDK 4.03 for the newer gumstixs (IronStorm, FireStorm, WaterStorm) that are capable of encoding/decoding up to 720p

If you have the e-consystems 5MP sensor you can use it as a source of the 720p stream with these workarounds:
A bug in the driver will frequently throw the error "Could not negotiate format" when there are no issues with the format, the above link is various techniques our group has used to workaround the issue.

Feedback is welcome,