Yes! I finally find a need to post something. I believe this my second.
Anyways, I've worked with handbrake a lot in the past on a similar system (G4 Powermac with a 1.47 processor and 1.5 gigs of ram). Unfortunately, handbrake requires a LOT of processing power, and with a G4 it just tends to take forever. Looking at the iphone option.... which... yeah, it's encoding it with H.264, a great encoder that probably requires the most processing power. On the plus side, it creates a file that is smaller and has better quality than any comparable alternative. I think my G4 could handle about 4-5 fps, which translated to about 3 hours for a 22 minute tv episode.
You basically have 3 options:
1) Wait 30 hours for the iphone preset and have a great video
2) Downgrade the quality of the video (either encode it as normal mp4 or lower the bitrate). I wouldn't recommend this but I'm a perfectionist.
3) Buy a new mac. That's what I did (well, for other reasons as well of course). With my 2.0 Ghz iMac I can chug along at a respectable 30 FPS, which is great but not as good as the 50 fps my brother got with the pc I built him.
Of course, the third option is definitely gonna cost you... but I can verify that it really does speed the whole process up.