Your size limit for how big the movie can be, depends on how big your SD card is, in other words WMP can play any size of video.
You don't have to convert the trailer unless it's not in *.WMP format. Windows Media Player on your Axim can only play *.WMP Movies THATS ALL. If you have a *.mpg or *.mpeg movie (I suggest getting a .mpeg or .mpg movie trailer, because those movies are designed for being viewed on a Pocket PC screen) then you'll have to download
The Free Pocket TV Program so you can play those types of movies.
Here is a great website to find *.mpg or *.mpeg movie trailers or short movies!