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What does "not working" mean?
As a workaround, render to QT:Animation, import into AE7 and render.
I've never been able to render h264 from AE.
The most no-brainer method is to render out a full-quality Animation codec QT from AE, then use Quicktime Player Pro's iPod or iPhone export preset. It takes care of everything.
I just did this, and it worked:
1. Add composition to the render queue.
2. From the Format menu in the Output Module Settings dialog box, choose H.264.
3. Click the Format Options button in the Output Module Settings dialog box, and choose Apple iPod Video Small from the Preset menu.
4. Click OK in both dialog boxes to accept changes.
This creates a .mp4 file that plays on a video iPod.
If this isn't working for you, please give details about how the process fails for you.
BTW, the instructions above are presented (in a different form, but with the same substance) in the "Format options and export settings" section of After Effects CS3 Help on the Web. If the Help document doesn't contain the information that you need, or if you'd like to add a tip of your own, leave a comment using the link at the bottom of any Help page.