I tried doing this with the LotR extended editions. The merge appeared to work but the second half has no audio, even though the second disk plays fine before being merged. Both were ripped with rip-it and encoded using the same settings under Handbrake. Both play fine individually but the audio problem after merging (second disk only) persists. Thoughts?
If you have the original discs or .isos, I'd use a program called DVD2One. It'll merge the 2 movie halves into one big .vob set. Then run the whole thing through HB. What's nice is the chapters also come along for the ride nicely.
HTH