Caveman (and everyone else), just thought i would throw in a few of my experiences of Blu-Ray to Apple TV.
I am currently encoding at 59% CQ with Handbrake and have been through many various settings to hit (what i can tell with my eyes) is the sweet spot.
I did use 6000 ABR but i found that on some movies this can exceed the ATV's max bitrate spikes, even with the movie synced. For example, in the opening song credits of Casino Royale, just as the second chorus of the song kicks in there are a load of fancy graphics on the screen which just stutter my ATV to its knees.
Using VBV Bufsize & Maxrate settings did help control that, but i then found unacceptable image artifacts on my movies. An example of this is Spider-Man 1 when Peter gets on the school bus at the beginning. As he moves down the bus his head is against a white background (bus roof) and you get this nasty orange glow around his head (just like the old oats advert for those of you in the UK and are old enough to remember!).
So, i just find ABR to difficult to control. Using CQ you get better control of bitrate spikes (should be lower by nature) and at 59% i think i get a great image with a controllable file size (on the majority of films) between 4Gb - 6Gb. There are some which are just way to big for my liking so i then drop down to 56 - 57% (Godfather 2, 15Gb - ouch)
These are just my findings and my thoughts and may not work for everyone. But hey, thats the nature of the beast
Cheers