What is the best way to convert MPEG-2 videos to MP4 H.264?
Solution 1:
If you're using an Apple TV to play this content on the TV I share your pain, and the time to convert everything is also a pain! This is an alternative suggestion, not an answer to your question.
If your main goal here is to simply watch the content, and you'd prefer not to have to rip, then perhaps XBMC to simply view it may be a better option for you (it was for me).
I gave up transcoding everything months ago because of the problems you describe, the long time it took to do it, and all of the steps to get it from the PVR and disc initially into iTunes. I then found XBMC for Mac; it plays the vast majority of formats without the need to convert anything, and maintains it's own library created from wherever you store the files. Obviously it won't be in iTunes, but I don't see that as an issue as most of the content is transitory and I don't keep it for long.
If you do use an Apple TV, then you could airplay to it while running XBMC, or if you're daring, you could jailbreak the device and install XBMC on it and share the folder with the shows.
Solution 2:
The solution I use for converting MPEG2 from DVD image or EyeTV recording to iPod-friendly MP4 H264 is based on HandBrakeCLI, the command line interface of HandBrake. It is also possible to use FFMpeg.
The settings are much more complex but offer much more freedom.
I spent some time figuring out what are the best options for me, then I put it in a bash script, so that I just have to give the pathname of the DVD image or the EyeTV recording as an argument to my script.