I do the same thing Rayward does. Get yourself a copy of Subler and set the cnID to the same number in both files (I started out at 1000 and then just go up from there) Does not matter what the number is, just has to be the same. Also select HD for the larger file. Then just drag both files into itunes.
If you are OCD about such things, you can get iTunes'
actual cnID and use that instead of making your own ID system. The advantages of this are: (1) your movie selections will be recognised by the Genius function; and (2) you don't have to worry about using the same number twice by mistake.
To get the iTunes ID#, got to the iTunes store, search for your movie and, when it shows up in the search results, right/command-click on the movie and select "Copy Link". Then, when in Subler, add the cnID field (now called "contentID") and paste into it the url you just copied. The iTunes ID# is the 7 or 8 digit numeric ID towards the end - it's easy to isolate by deleting the "&" and everything that comes after it; the ID is the number set at the end, after the "=". Delete everything but the ID#, copy it (to paste into the other version of the movie) and save the file.
The only other thing you need to do in Subler (unless you want to add/correct any other tags) is to go to the "Other Settings" screen, set the media type for both versions to "Movie", and
for the HD version only, check the "HD" tag.
Save your files and then drag and drop them into your iTunes library. You will see the "HD-SD" flag show up right away - meaning that iTunes has accepted the layered entry - and the other tagging details will show up once both files are copied up.
ETA: Sorry Diode, I realise you know how to do this, but the idiot's guide was meant for others reading this thread.