Thanks for the tips... I will definitely check them out. I am not looking for a tool that will compress video like Handbrake does. I want to take existing (compressed) Video_TS files and convert them 1:1 with no (additional) loss in quality to MP4 or as you have suggested... possibly MPEG-2 so they will be easily recognized and played with BOXEE.
I don't know if BOXEE can play MPEG-2 encoded video, maybe
MRoogle might help.
But as you mentioned MP4, or .mp4, which is a container/format for MPEG-4 encoded video, I though you were talking about transcoding, or compressing as you say.
MPEG-2 encoded video is already highly compressed, though inefficiently, as it is a very old codec compared to MPEG-4, and using Handbrake with the
Apple TV preset will produce high quality .mp4 files, with no visible degradation and the files will be much smaller, as MPEG-4 is a much more efficient and advanced codec than MPEG-2 is.
But if you have no problem using the VIDEO_TS folders in BOXEE and if you have enough HDD capacity (up to 8GB per DVD), then transcoding the video might not be necessary.
But as transcoding via Handbrake would give you a much smaller file (1 to 2GB) with no visible quality loss, you could at least give it a try. Many people have done it successfully.