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I usually just make 1 file that will play on both.
 
I use the universal preset in Handbrake for SD sources. I'll make two files for HD sources though.

oh yeah, i meant for HD sources, sorry. so for all HD movies, you make 2 versions? that's what i'm starting to do (as i get more blu ray movies), but wasn't sure if this is the only way.
 
I haven't done this yet, but I will when I finish ripping my DVDs (after a few years, I can actually see the end of physical media!) I think I have a system.
I have a NAS that holds only my videos (music videos, tv, movies) and once everything I own has been encoded (Apple TV preset with some tweaking), tagged and properly sorted I am going to use visual hub to make a HUGE queue (300~ movies, dozones of TV show seasons) and create iPhone versions of all of those videos. I'm not going to keep them in iTunes but instead either on my portable USB or in a seperate folder on my NAS (maybe both).
I don't normally sync video onto my devices (though having a version ready to go would just mean that I have to copy it into itunes) but instead would use a program like Telekinesis to be able to connect to my home computer and stream the videos to my iphone (I would navigate to the iPhone Converted folder and see a list of all of my videos ready to go!). If I'm at home (or someone elses home) it will all be on WiFi.. I likely wouldn't need too much video-on-demand when wifi isn't available... and when I have 6gb a month, most movies would end up being 400-500mb each and I would rarely watch 12 movies over a cell network randomly each month.
That's my plan, prevents any clutter in my itunes library and still technically lets me have access to all of my videos on my iphone.
 
I'll sometime use the file to playback on my computer when I'm doing other things that make the HD version freeze/pause, or it takes up too much of the screen. It is also nice when outputting to TV via iPhone.

Got you :)

I was wondering about making iPhone/iPod touch versions. If I make them from the AppleTV conversions I've already done (rather than from my original DVD's) using the iPhone & iPod touch preset, will I be better increasing the 'constant quality' setting to 100%, so I'm not multiplying the quality reduction, or will I not see a difference if I leave it at 59%?
 
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