Since you're working with the new updated Handbrake this might not be relevant now, but something to consider for the future.

(aside)

Although h264 is a current standard and focus of Handbrake's updates, have you looked into Ogg Theora? It's an open source standard very comparitable to h264.

http://en.wikipedia.org/wiki/Theora

The hopefully implemented soon upgrade of Wikipedia to include video in all pages will rely on Ogg Theora as their codec.

http://news.cnet.com/8301-27076_3-10289952-248.html

Archive.org is another supporter of the format. But these two sites have the open source nature as one of their primary decision making forces.

here's some articles on the h264 vs Theora debate:

http://www.techcrunch.com/2009/07/06/html-5-ogg-theora-vs-h264-in-the-battle-for-a-web-video-standard/

http://arstechnica.com/open-source/news/2009/07/decoding-the-html-5-video-codec-debate.ars

none