I haven't used an iTouch for video capture but for a rugged video camera to be loaned to students at a similar price point you may want to take a serious look at the GoPro Camera line: http://gopro.com/cameras/hd-hero-naked-camera/

Without some more detailed information it is hard to diagnose the issue. The Apple TV should play the video at whatever frame rate it is encoded as and other than the 'cinematic' look of 24fps (which is also roughly the frame rate of PAL) there shouldn't be anything blotchy. It could be the specific download had an encoding issue, or it is a network latency issue. If you have more info perhaps we can direct the question to someone who could get a better answer for you.

I am hoping we can get a link to the webcast the Apple did not too long ago soon but in the mean time here are a few of the resources I've found informative/helpful:   Apple's Page http://www.apple.com/education/itunes-u/   Apple's Support Community for iTunes U https://discussions.apple.com/community/app_store/itunes_u_for_ios   Apple's iTunes U Support general page http://www.apple.com/support/itunes-u/   engadget's Hands On video (audio is a little rough) http://www.engadget.com/2012/01/19/apple-itunes-u-hands-on-video/   Chronicle article on Duke putting up a new iTunes U optimized course http://dukechronicle.com/article/duke-introduces-course-new-itunes-u-app     What are your favorite resources for iTunes U?

I'm looking to upgrade sooner or later to the 4S as well ... my well worn 3G has been caseless for most of it's existence as I found a wallet with a slot for the iPhone (I've tested it on the 4s and they fit nicely as well. You can't use the iPhone when it is in the wallet but I don't think I would want to anyway. It doesn't take up much room and is the same size as my old wallet. http://www.ipocketwallet.com/iphone-wallet-gallery.php#iphone-wallet-images/ipocketwallet-iphone-wallet-1.jpg It's $45 but I only buy one wallet a decade or so anyway.

Currently you can view the presentations and download the keynotes here: http://education.apple.com/academix/ I'll get back to you next week with more info on iTunes U availability if I can find anything out.