First, let's clean up misconceptions: AMV is very smiliar to mjpeg video (frames are jpeg frames without quantization table, same as mjpeg frames) and IMA ADPCM is used to encode audio (not mp3 frames as often mentioned). Audio format isn't exact IMA ADPCM because it include 8 bytes at beginning of each frame which are used to seed ADPCM decoder.
Let's for a moment consider hardware of those players: there is Z80 and DSP. When playing mp3 files, DSP is used to decode audio, but when playing video DSP is used to decode jpeg frames (this also limits maximum frame rate and picture size). So choice for ADPCM was logical since I suppose that Z80 decodes audio while playing movie.
All this is done using clean-room reverse engining, which means that I only used output from Windows encoder. No disassembling of Windows code was used (hey! why would someone waste his time on that?).
As a result of this, there is enough knowledge embedded in script (and in this post) to create encoder. I probably won't have time for this in next few weeks, but my idea is to make perl script which will open any movie file supported by ffmpeg, resize it on-the-fly and than mungle avi output stream to produce amv. You can think of it as cp which on-the-fly converts movie to your player.
If somebody knows if this ADPCM variant is supported by ffmpeg (reading source didn't help much) I would be grateful for info.