I was able to add a bunch of AVI files to Handbrake's Queue and convert them. Once you choose an AVI file just click on the "Add to Queue" button instead of the "Start" button and you can add more files to convert.
Yes but however this is still a manually intensive processing for adding a whole heap of smaller size AVIs to be processed, as opposed to being able to say "convert everything in this folder", or "select on whole heap of specific files in one hit and add them to queue", if you know what I mean.
1) Go to the Queue tab in Preferences and click the "create hot folder" button. Choose whatever folder you want as an 'inbox' folder for new videos
2) Select if you want to process new videos immediately or after fixed intervals (I prefer the latter and set the number of minutes to 120)
3) Check "Never ask confirmation to save metadata". Otherwise it will show you a confirmation window blocking the import process.
4) Check "Automatically requeue videos". Otherwise if you are copying/downloading big files, VideoDrive will try to import them but fail as they are not complete yet.
That's it! As soon as you have a new file, VideoDrive will do it's thing and put the file in iTunes.