I would investigate ffmpeg, specifically libavcodec – this will allow you to convert static images in to a movie file (assuming you can get it to compile for iOS).
As far as adding to the iPod library is concerned, you aint going to be able to do that – you can read from the library from within an iOS app, but not write to it.
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solved iPhone programming – How to create a movie file from muti images and save it in iPod library? [closed]