HandBrake is garbage. There are 2 ways to force a framerate, but neither work. IVTC'ing a video is a pain in the ass, too. No matter what you do, HandBrake will ALWAYS encode in VFR. Screw HandBrake.
Which container do you guys recommend? MKV or AVI? I've heard MKV has better compression ratios resulting in high-quality video while being a low-space format.
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only time I use AVI is when I'm encoding video for my 360 (which I haven't done in a very long time) or when I plan to add hardsubs (also very rare), for which I use AVIMux. I prefer MKV over AVI for various reasons which have all be stated, but mostly because of how flexible it is. It's much easier (and requires a bit less space) to encode a video with multiple audio tracks in MKV.