Alright, so I tried to convert a movie or two with the suggested settings at the Handbrake forums, I also decided to do a 6 Channel AAC conversion with a DTS Passthrough to see if it could handle it.
So I ended up with a movie that's 7.38 GBs and a TV Show Episode that's 3.45 GBs. The movie took a while to buffer and that's with a wireless network. It didn't take hours, but just a minute or two, once it started playing, it played smoothly. The TV Show on the other hand, played almost immediately. The only difference with the TV Show conversion was that I didn't include the
Advanced Option string. I have no idea if that really made a difference, but it looks like it might have.
As for the DTS, it looks like that Apple TV doesn't support it at all. There's no indication of it being played through my receiver, I really can't tell. I assumed that it would just pass the audio to my receiver and just let it handle it, but it doesn't seem to be able to do that at the moment. Either that, or I don't know how to do it.