I think I've worked out the details on converting. Now the question on how many version for all these devices. I currently have ATV2, iPad2 and iPhone4. No iPS. I would rather have just one file for all these devices.
Any thoughts with this workflow? I will use ATV2 Preset, CQ19 or 18 and 1080p for all three devices. Also I stream to ATV2 with Airport Extreme 5th with 5ghz strictly used for ATV2.
I think all those devices (if there's a doubt about any it's the iPhone 4), can handle the 1080p file. The rationale for different versions is file size - which is most likely a bigger issue for the iPhone than the other devices. If you do not plan to put many movies on your phone, then go ahead an code to 1080p and you should be good to go (previous caveat regarding the iP4 applies).
I will need something less than a 1080p version of movies because my ATV1s would fry themselves trying to play that type of file. I also like to have a 544p version for my iPhone 4S, so that I can get more choices on there (it's a 32GB model). Of course, this means that two (or maybe three now) versions of the same movie increase the size of my library exponentially, so that's a further consideration especially if I have two levels of "HD" in addition to the "SD".
Assuming your iPhone 4 is up to the job of playing a 1080p file, then you're good to go with one version. It's all about where you want your storage crunch to be.