So you're saying I should save the original video as a .mov (or mp4 or m4v) file, then open it in QT and add chapters and then do a 'Save as'...?
No, it is not necessary to start with media in a MOV container. What David is saying is that you can't put chapter markers on your media (either manually or in an application like iMovie) and then export/convert your file to another compression format. If you do, the chapter data will be lost. Instead, export/convert to your target compression format first. Then chapter the file and use "Save AS..." to save the file with the chapter track.
I personally prefer using a dedicated application like
Metadata Hootenanny (free) to chapter the files. (I.e., use the integrated timeline thumbnails to approximate your chapter points by double-clicking on the thumbnail and then switch to the integrated player to step to the exact frame you wish to chapter. Now, switch to the chapter list area and press the "plus" button to add the current time index of the play head to your chapter list. When finished, simply save the file. Since the MOV file container cannot be associated with "artwork" in iTunes, I add one more step to the workflow. I open the chaptered file in QT Pro, drop the "artwork" graphic to an appropriate location, and it as the "poster frame," and then save the file again using "Save As..." to change the fie name which, depending on the initial type file container, may now contain a doubled file extension -- e.g., ".mp4" is usually changed to an ".mp4.mov" file extension.
