Assuming your goal is quality over file sizes, remuxing would be better as it doesn't involve re-encoding the video file (just putting the same quality video file inside an

TV-friendly container). Remuxing is also a lot faster (because it's not re-encoding, just repackaging the video file). There are some people who are saying that these "high bitrate" files are playing perfectly fine- even on the

TV2 since the most recent software update.
Some might say going the Handbrake route is best because then you can create an optimized file at 720p which is the max that is going to flow out of the box to the HDTV. Others might say remux at 1080p so that you are future-proofed for when you want to replace that generation with an

TV3+. Still others might ask if you want to rip your BDs now and then rip them again later? If so, rip them now and Handbrake them into a nice small 720p file. Then, later re-rip for 1080p playback when you upgrade to

TV3+.
The downside to remuxing 1080p from BD is that the resulting file is typically huge compared to re-encoding it through Handbrake (to either 1080p or 720p).
If your goal is 1080p files (even though your

TV2 can't push 1080p out to the HDTV), you may want to just be patient until the Handbrake team can get an

TV3 and develop a preset for it. Then, you might use that preset for optimized 1080p files (that may play fine on the

TV2 at 720p). But even that will need to be tested.
Otherwise, if you are happy with the

TV2, cranking up the video size to 1080p isn't doing much for you except maybe making the video file bigger: you may just want to optimize for 720p until you need to replace the "2" with a "3+".