In that all things Apple video use Quicktime:
Quicktime needs an Apple TV 3 1080p export from Quicktime.
Passes through normally any 1080p sequence
Deinterlaces with user chosen method and quality for 1080i sequences.
Creates H.264 with correct Apple TV Video/Audio settings, with quality choices for video compression.
Why deinterlace? Because Apple TV 3 streams from iTunes, which also allows desktop playing. 1080i looks bad on the desktop. The deinterlace is simply housekeeping, though it should be done well.
Retrieving data ...