You can get the latest snapshot from the Handbrake forums, here:
http://forum.handbrake.fr/viewtopic.php?f=7&t=13969
It is unsupported code, not as tested but newer. It is working excellent for me.
Just change the 960 to 1280. The other number (544) will be set correctly for you depending on source if "maintain aspect ratio" is checked.
Basically, I find that Handbrake's "recommended" settings don't always work, especially with 720p, which is entirely hit and miss here. Some movies like Star Trek VI took me like 4 encodes before I got one that didn't stutter when the Praxus moon blew up and these are at rates that SHOULD work FANTASTIC with AppleTV from all the chatter about the maximum rates ATV can handle, etc., BUT they don't work anywhere near those rates because there is no way that I can see to set peak limits. That explosion scene creates a problem because you can only set AVERAGE limits and it just cannot handle it until the average is so low that you wonder if the overall quality will suffer during the rest of the film. And yet other films like The Matrix, which has all kinds of motion going on play perfectly fine here after encoding at a much higher average rate. There's something happening there that's not easy to analyze and re-encoding a half dozen times for a giant HD movie to try and get it to work is a royal PITA.
Handbrake can be aggrivating at times and it often feels like the Handbrake developers couldn't care less about Apple TV (latest development version I'm using which is a couple of months old at best doesn't even HAVE the M4V option listed anymore; I have to manually type it in EVERY TIME now. With DVDs, the % option defaults for Apple TV usually work well, but with 720P all bets are off. Plus I have yet to find a good setting for VIDEO transfers (i.e. 30fps, interlaced no 3:2 pulldown). In short, when I transfer something like my Red Dwarf DVDs to Apple TV, I'll get all kinds of weird choppy/tearing issues on long scrolls (like pans past the ship) and this is seemingly caused by it being video, not film (which pans perfectly all the time). I KNOW it CAN be encoded without those issues (Quicktime conversion doesn't cause things like that), but it's not obvious how to get Handbrake to do it. Quicktime is bad, though because it's very VERY slow and doesn't normally handle things like 5.1 audio.
I would gladly BUY many of these movies straight from iTunes to get perfect working 720P files (I've never seen a hiccup with Apple HD movies except when the wireless network itself burps; which is easily shown by replaying a scene and whether it does it every time or just when the network burps once in a blue moon) but as most of us know, Apple has been insanely slow to roll out HD movie sales. Their HD rental selection is pretty good at this point (better by FAR than going to Blockbuster on the whole, but probably still less than Netflix) and it's instant gratification (takes about 50 seconds here before the movie is ready to play on my 5Mbps connection). The problem is you cannot buy MOST of those movies. $12 for T2 and $17 for Top Gun aren't too bad of buys given most Blu-Ray movies are still in the $27-32 range.
As for quality, all my rentals from iTunes look great on my high quality (rated as one of the highest when it came out) 720P projector and 93" screen from 8 feet unlike what some of the Blu-Ray folk would have you believe about using cheap 1080P sets at 3 feet away because the eye CANNOT resolve 1080p on a 50" set at 8-9 feet; 720P is the maximum resolving ability at that seating distance with that screen size, so MOST snobby comments by Blu-Ray fans are just total 100% BS; I have a 93" screen at 9 feet and that is large enough to see 1080P and I'm saying 720P still looks darn good unless of course you have a two-bit crappy scaler in your tv/projector. Basically, cheap crap = cheap result. This is easily proven with computer monitors. Less expensive monitors have cheap scalers and so most look very bad when showing resolutions that aren't NATIVE to the display and so looking at 720p with text will show you a blurry/softer display than at 1080p if 1080p is the native resolution. But with a really good scaler, it's virtually indistinguishable from 720p on a 720p monitor). I have two 24" LG monitors in my den. One cost $600 (connected to my PC) and the other cost $300 (connected to my MBP when docked). The scaler is the biggest difference between the two. The $600 model looks great at any screen resolution thrown at it. The $300 one looks like crap unless it's at its native resolution (which the MBP is happy to oblige it with so it makes little difference there, but COULD make all the difference if you're feeding it more than one resolution. I think this is where a lot of the ATV looks like crap comments come from. The users have cheap (i.e. cheap scalers) 1080p sets that cannot show a decent picture with anything but 1080p and so when they feed it 720P, it looks inferior. My Panasonic projector has a high quality scaler. 480P is indistinguishable from a 480p native display, for example and 1080i looks MUCH better scaled by the projector than having the cable box (poor scaler once again) feed it 720P for everything. Most people are blissfully ignorant of all these details and so they shoot their mouths off about things they know virtually NOTHING about on a technical level. I would venture most people on here watching a 720P ATV movie on my setup would never in their lives guess it wasn't 1080p Blu-Ray they were looking at because they've never seen a 93" picture at that quality level at home before. Yes, 1080p would look better yet, but that doesn't make 720p "crap". And frankly, all the belly-aching about ATV's bit-rates, etc. is pure BS. I can freeze frame any given scene on a 720P movie and I would like to see anyone point out the so-called distortions created by those bit-rates. People give H264 compression far too little credit for what it can do with a good encoding. It's like saying a JPEG at a 90 setting is crap compared to the JPEG at the 100 setting becauese it saves like 3x the space. Yeah, like you'd ever even notice the difference.
I saw AppleTV on MacWorld's list of 10 biggest decade blunders by Apple and I think that's just plain ridiculous. AppleTV is basically a playback component on a household level audio/video system. Not everyone has X10 automation set up in their house, let alone set up properly and to be useful. Does that make X10 automation "crap" because it doesn't sell like hotcakes ? No, it does not. I spent the last year converting ALL my media to iTunes digital formats from hundreds of CDs to hundreds of DVDs to dozens of laserdiscs and VHS tapes, weeks worth of home movies (ranging from VHS to Hi8 and digital camera files to convert) to around 5000 photos (half of which had to be scanned with either a negative scanner or from photo album prints and then all cleaned up one at a time with Photoshop. *ALL* that video media is 480p or less and yet still needs to be preserved. The photos are scaled automatically for display so there's no issue there either. I can now view/listen to that media all over the house and it can easily be dumped onto a 3rd generation iPod Touch to view/listen or onto other media (like my 8GB micro-USB stick to play in the car with the equivalent of 100+ CDs). THAT is the point of iTunes and Apple TV. It's an extension of the media playback experience. It lets me watch any movie, tv show, photo or listen to any song with a simple navigation menu or iPod Touch interface anywhere in the house I have one. THAT is the point of it, but like so many other devices, if it's done half-arsed, it's going to suck.
If Apple TV handled 1080p, there should no complaints, what-so-ever except from those that want this or that software (which hacks seem to handle). But I guarantee even IF Apple releases updated hardware this year at some point, you will STILL get the whiners that say that 1080p from iTunes SUCKS HARD compared to Blu-Ray which has far less compression and is therefore the superior format, blah blah blah. Yeah, have fun shuffling Blu-Ray coasters guys on your cheap 50" HDTV sets. I, for one, *HATE* animated menu systems, advertisements and movie previews, FBI warnings, etc. (that often FORCE you to sit there and watch them EVERY SINGLE FLIPPING TIME) that just WASTE MY TIME on disc formats. I'm not getting any younger. How many days of my life have been wasted to being forced to watch retarded FBI warnings over the years that we all know and have seen thousands of times over. Thankfully, those all disappear when I convert my DVDs or BD discs over to Apple TV or when I rent or buy a movie from iTunes. The movie just plays! It's like a miracle! I mean it too!
What I find really funny is how people get all uppity about Blu-Ray and supposed massive quality differences (despite all the above) and yet these same people didn't mind listening to 128kbps MP3 files (often less) for the past decade on ultra-cheap two-bit ear-buds of all things. We're talking about real differences here. These same people today will often either just listen to the cheap speakers on their flat-screen TV (i.e. total garbage) or some cheap-o $399-800 "all in one" speaker outfit with 3" drivers and some fart box they call a "subwoofer" that sits behind recliner somewhere with the speakers all arranged around the furniture instead of the other way around for proper imaging. Apparently, a good picture is important but sound is a waste of time with these people? That won't stop them from arguing on about how you NEED Dolby True HD (Dolby Digital or regular DTS won't due) and then play it back on $50 a speaker fart cans. When I say funny, I mean I'm practically on the floor sometimes with the sheer IGNORANCE about what is quality and what matters and what doesn't. And it doesn't even matter if you show someone what true quality is at your own home, they will still go home and buy fart cans and hide them behind potted plants and what not because the aesthetics of a living room is more important to most spouses than proper sound or even a straight line of site to the display! How many houses have you been to where the couch is in the middle of the back wall and the TV is in the corner of the room? You're craning your neck the entire time trying to watch a show and this is normal. Often, fireplaces screw up rooms, but with drop-down screens and flatscreens you can mount over the mantle, this should not be a problem these days, but it happens just the same. Throw the left speaker next to the TV in the corner, the right speaker on back right wall and the surround speakers in the bathroom down the hallway. Yeah, "home theater". But it has a Blu-Ray player! And Boze 1.5" drivers! It's GREAT. Apple TV *sucks*.
