Once again, I’m here not so much to post some grand new thing I thought up, but to simplify what it took me a week’s googling, experimenting, and the like to figure out. How the heck do you encode an HD H.264 file so it plays back smoothly on your Transformer and looks good at the same time? (No, not the prime, the old-skool Tegra 2 version)

Step 1: Download Handbrake and install it.
Step 2: Select your source. This can be a decrypted Blu-Ray rip, an EyeTV recording, or just about any video file.
Step 3: Give it a name, and select a MP4 File using H.264 (x264) with a Constant Quality RF setting of 21. You can choose 20 if you like for a higher-quality encode, but that might push you over 4GB on some movies, which will break your files on Android.

Step 4: Make sure your audio file is set to AAC (Core Audio). Setting this to MP3 royally screws up playback, I have no idea why.

Step 5: Copy the advanced settings in the picture below.

Step 6: Click the “Picture Settings” button and use “Custom” to crop your video if necessary (eg. if recorded off TV it may have bars/jagged margins). Crop and resize down to 720P (1280×720). You can leave Detelecine and Decomb on their default settings.

That’s it! Your screen can’t display full HD content, and your hardware won’t handle it anyways, so don’t go any higher than 720p. If you have Honeycomb (3.1 or later) installed on your Transformer, Gallery should play these well. Otherwise, DicePlayer is a great Hardware-accelerated player, which as of now you can’t buy since their checkout account has been suspended (not sure why).