Here's how I do it (summarised, if you run into trouble with a particular step just post back):
1. Use MacTheRipper in demux mode to rip the stereo audio streams.
2a. Use "AIFF from PCM" to convert the PCM tracks to AIFF.
2b. OR use "bd4go" to convert from AC3 to AIFF.
3. Drop the tracks into iTunes.
4. Select all the tracks, right-click and convert to AAC.
5. Delete the AIFFs.
6. Clean up the tags.