i use handbreak all the time, just select the show, make sure you select the right preset option for the apple TV you have (Handbreak has presets for the original, the 2 and the current model) , and let it do it thing, it really doesn't get much simpler than that.
Make sure you have the latest copy of VLC installed , as handbreak leverages that for codecs i believe (though i could be wrong on that, ,but with VLC installed handbreak seems to encode everything ok, without VLC it failed on converting MKVs)