Since the AppleTV is your most restrictive device, just use the AppleTV (not AppleTV 2) preset in Handbreak,. The output will still look pretty great for DVD rips.
If you start converting HD sources, you might consider switching to the AppleTV 2 preset and leaving the original AppleTV behind for those programs. Programs converted with the AppleTV 2 preset look great on the iPad and iPhone 4.