As far as I know you can use the IC for conversion.
The only problem is that its output is limited to 1024x1024, which means that higher resolution cannot be encoded.
Saying that, I must add again that this means that the VPU encoders are very VERY limited:
The VPU encoders support 1080p (1920×1080) but only with a specific variation of YUV420 (Y channel must be planar)
The only way to encode 1080p video will be to use a camera sensor which streams this exact variation of YUV420.
Since this PLANAR format is not exactly the best known way for streaming video (and thats an understatement) - it actually means that VPU encoders can effectively work only on 1024x1024 resolution. (which is the IPU's output limit).
This means more complicated software, heavier RAM usage (capture interleaved YUV420 image to memory, read into IPU IC, write planar YUV420 to memory, and read it into VPU...), and resolution limit lower than 1080p.
Hopefully someone at Freescale will explain what this 1080p encoding capability can be really used for...
For now, I suppose I'm stuck with YUV422 and MJPEG encoding. Not too bad, but not optimal.