I just have to add my two cents here...
I have been encoding Blu-rays for about 2 years now. I have a mid-2011 iMac 21.5 inch with the 2.5 Ghz Intel Core i5 processor and 10GB of RAM. I open the disc in MakeMKV, select the movie itself and turn off all subtitles and audio that are not English. I then rip the film into a folder on an external 2TB drive. It typically takes about 1 hour to make this MKV.
From there, I drop the MKV files into Handbrake and select a custom preset I call "HD Encodes". It is basically the same setting as "AppleTV 3" but the FPS has been set to "Same as Source" instead of "30". I select for my file to encode into the same folder as the MKV, and name my file "<title> (HD).m4v" and add it to my queue. Then, I use the same MKV and create an encode using a custom preset I call "SD Encodes" which is the same as "HD Encodes" but resized to 640 x Whatever (typically 352, but whatever the height would be that allows for 640 on the width) and an average bit rate of 1200. It also has the "iPod 5G Support" box checked. I name the file "<title>.m4v" and also save it to the same folder and add it to my queue. If I have multiple BD's to rip and encode, I repeat the process and add to the Handbrake Queue. Once I am all done, I hit Start and let things run.
My HD encodes typically take 4-5 hours and my SD take about 1. My SD encodes used to take about 15 minutes, but at some point I upgraded my Handbrake to one of the nightly builds and everything has been slower for SD ever since for some reason. My SD encodes typically end up around 1GB for every 2 hours of movie but my HD encodes wildly vary in size from around 4GB up to 17GB. I find that the digital animation titles (like Toy Story 3) are smaller where the films that have varying levels of grain (like Moneyball, which has some scenes with lots of grain and some scenes with none) go larger in files size.
Once the files are complete, I drop both in Subler and make sure they have matching metadata and artwork selections. I add a tag for "contentID" to both files and make it "12345678" in both files and save. I then highlight both files and drop them in iTunes at the same time. This gives me the SD and HD versions of the film in iTunes with a single icon. When I sync an iPad, iPhone or iPod, I have the "prefer standard definition videos" checkbox checked. This ensures I take up the least space on my portables but can watch the highest quality file on my AppleTVs.
I have a 4TB USB drive for my Films and a 3TB USB drive for my TV shows (I have far less contest in HD on the TV side) hooked up to my iMac that I store the iTunes content on. In addition, I have a second Mac (a pre-intel G5 tower) that has 2 2TB drives internally installed. I have about 75% of my encodes backed up onto those drives. I also have a 4TB and a 3TB drive that are exact copies of the online Film and TV Shows drives that I plug in periodically to update, but leave offline and unplugged for the most part. Lastly, I have a 4TB drive with all my home videos and pictures that I keep offline at at my parents house, in case something happens at my house. I believe in lots of redundancy (clearly) when you live digitally.
Now, I will admit, I am not an audiophile. In fact, I watch my movies using the built in speakers on my HDTV, and they are awful. I am thinking about getting a sound platform (think sound bar, but your TV sits on top of it, instead of the bar being in front and under the TV screen) but as far as sound goes, I just want to be able to hear the characters talking and action. I have 2 kids and no desire to wake then nor scare my neighbors when I watch a film.
As far as visuals, my picture is pretty amazing. It is better than when I watch an HD feed on HBO. It is possible it isn't quite as perfect as playing the BD disc on my PS3, but to be honest, I almost never do that, so I wouldn't know the difference. Meanwhile, everything I own (about 900 movies, 200 of which are BDs, 100 TV shows making about 2500 episodes, plus 400 home videos of family) is literally a couple of clicks away on the AppleTV and ready to watch. I never "can't find a disc" or worry that my kids will damage a disc and make it unplayable. I touch any disc I buy 1 time and then put it on a shelf. Everything I have digitally can be watched on any of my TV's at any time, as well as put on my various portable device and even shared with family members who I have done the same set up for. With such a library of titles, I rarely watch Special Features, but if I wanted to watch them, I suppose I could always pop a disc in.
My favorite things to do are adding to my encode collection and show it off to friends and family when they come over. I have yet to meet someone who isn't impressed by how large yet detailed and easy to use my set up is. My close friends refer to me as "Zaxflix" (my name is Zack) and I love it. My kids don't understand why places like hotels and other houses don't have every movies they could want to see just a couple remote clicks away from playing. My set up might have some flaws for other people, but I love it.
So that is what I do, how I do it and a bit of the why. Just thought I might share.
