Filesize isn't as much of an issue as bitrate... As long as your .mp4 doesn't exceed 5Mbps, tv shouldn't have problems.
With regard to filesize, the only limitation is that files larger than 4GB are a little persnickety in iTunes. Keep the filesize below 4 gigs, and you'll have no problems adding poster artwork, and importing to iTunes/syncing to tv.
I have done a lot of 720p mkv conversions for my tv in Visual Hub. I always use the AppleTV, Go Nuts setting, but in the advanced window, I tell it to constrain to a filesize of 4290 MB (through trial and error). Doing this always yields a filesize of 3.99 gigs, so I have room to import into iTunes and add hi-res poster artwork.