1. As long as you have a relatively recent Mac, you may as well use H.264, even if the improvement is not that great.mmm.... theoretically you are right. I wonder how much bitrate can that video quality enhancement save. 20? not much IMHO.
iTunes only reads files readable by Quicktime, unfortunately. No MKV.Why make such an easy task so difficult with all these 3rd party apps?
1) Drag your movie into iTunes
2) Right click on it and take "Convert selection for iPod" or "convert selection for Apple TV".
Couldn't be simpler.