I am having a similar issue, except I have tried using handbrake. Sometimes it works, mostly with SD content, but when I try to convert HD content using either the Apple tv, Apple tv legacy, apple universal, Normal or high profile the audio ends up sounding like when you play a record backwards, and the time on the track is over 3x or 4x the original files length. Also sometimes when HB works on the "appletv settings its supposed to be able to be viewed on a 3gs which is not the case. This appletv is becoming a bigger pain in the behind than I was anticipating. When trying to convert the HD files in itunes it takes about 5 minutes and all there is a white screen. QT will start to convert then either "time out" or an OSS38 failure. Seriously considering a used intel mini and running plex off it.