Converting an already-uploaded file and saving it to a model's FileField
Clean, easy to understand code. However:

Never hide errors with a bare except. Change 

try:
    ...
except:
    return False


into 

try:
    ...
except (IOError, AnyOther, ExceptionThat, YouExpect):
    logging.exception("File conversion failed")


Also, unless you need to support Python 2.4 or earlier, you want to use the files context manager support:

with open('%s.flv' % output_file, 'r') as f:
    filecontent = ContentFile(f.read())
    video.converted_video.save('%s.flv' % output_file, 
                               filecontent, 
                               save=True)
remove('%s.flv' % output_file)


That way the file will be closed immediately after exiting the with-block, even if there is an error. For Python 2.5 you would have to from __future__ import with_statement as well.

You might also want to look at using a temporary file from tempfile for the output file.