Suggestions/Ideas for a "Show Me" project for school about Audio or Video Encoding?
Entropy

Entropy is an important and notoriously difficult to teach (and understand) concept in physics. It's often explained as a measure of disorder, though that's not technically correct. However, from this perspective a video with lots of small particles would be considered to have a higher entropy than a video showing a black screen, for example. Read this for an explanation of the 'confetti phenomenom' and watch this great video by TED-Ed about the general concept of entropy.

Not gonna do your project for you, but you could for example show how the visible artifacts in a video increase when the amount of small particles in it increases (use a constant bitrate for this though). Based on this you can explain related topics such as bitrate, temporal and spatial interpolation and compression in general (read up on how archive recovery files can be used to replace ANY missing part of a split-up archive, cool stuff (though more maths than physics (is physics just applied maths though?))). 

Have fun!