iPod DVDs formatted for iPod and ATV

I have a DVD formatted for my iPhone and another copy formatted for ATV. I just understood this was the way it had to be.
However, I have both copies in my iTunes library, one with a comment that says "formatted for iPhone". That said, I told my ATV to sync this one movie and clearly it is syncing both copies because it is the same movie. Is there a way I can prevent the iPhone copy from syncing with ATV?

I did uncheck the iPhone formatted movie but upon second sync of the iPhone it removed the movie from my iPhone as it thought I wanted it to sync off the iPhone due to un-checking the selection.

Ok perhaps I am confused then. Why would there be an iPhone/iPod/ATV option then if one encoding function was suitable for all devices?

Also, the difference appears to be in the bitrate and then of course the file size. I guess the only thing I can do is experiment with both formats on ATV to see if they're truly similar in quality. I don't want it to look like crap to save space/time though I'm far from an HD snob myself.