Just making sure they are working together. Sounds like they do.
Are there any other apps u use with handbreak?
Does handbreak and vlc have auto updates?
Handbrake has auto update. I don't remember if VLC does auto update, but it does have a Check For Update button in the application meu. I just remember to hit it once a month.
I use iDentify. It's a great little app which downloads the artwork and writes the correct info into the m4v/mpg file so that it shows up in iTunes under the correct place (TV series or Movies) and with the artwork, season number, description and so forth. You just have to make sure that you name your output files from Handbrake in the format that iDentify can understand.