Converting Video To Be Playable By ATV

Hello....
Just bought my ATV & now in the mid to organize all video files in order to play using ATV.
Had quite a collections of movies stored in my external drive & saved using 3ivx MPEG-4 format (MPEG-4 video codec) which was not playable by ATV. Read somewhere in the communities that it is recommended to use H.264 codec instead of others. Would appreciate advise from anyone pertaining the simplest way to convert to all these video to H.264 codec.
All movie files are having almost the same details (info from QTP - Movie Inspector), refer below.
Format : 3ivx MPEG-4 5.0.5, 720 x 400, Millions AAC, 5.1 (C L R Ls Rs LFE), 48.000 kHz, FPS : 29.97 Data Size : 0 bytes.
Questions ;
1.   What would be the best video format to be used, H.264 or MPEG-4? What is the reason behind it? I'm looking into minimum losses with higher quality video image.
2.   If I want to convert all to H.264 format, how best do I convert all 2 TB storage within the shortest time possible? Or do I need to convert it one by one?
3.   Read somewhere in the forums, it is adviseable to use MPEG Streamclip in order to convert files to H.264 codec. Please confirm this.
4.   Had downloaded the MPEG Streamclip 1.9.2 & tried to convert one of the movie. Copy paste it from my external drive. Under MPEG Streamclip pane, open File --> Export To MPEG-4..., choose H.264 as Compression, choose Apple TV 16:9 (SD) under iTunes, Quality 50%, B-Frames, Limit Data Rate to 5 Mbps, Sound : MPEG-4 AAC Stereo Auto 256 kbps, Frame Size : 712 x 400 (16:9), Frame Rate : 30 & Interlaced Scaling. Do I miss anything?
5.   When pressing Make MP4, Create New MP4 File box pop-up & asked me to provide name under Save As & Where. I used the same name but added H264 at the back of the name & wanted to store inside the same external drive, but under different folder (common). When pressed Save, an error box pop-up with message Error :can't create the MP4 file. What had gone wrong?
Please assist.

Hello Marian
Thanks for your prompt response.
I was, luckily, thinking along those lines however I need to find the means to control the video using Javascript. (surfing for a while now with no luck).
Do you know where I may find out how to do this?
Thanks again.
ps checked out "hulu.com" and they wern't able to tream video to my part of the world - abc.com was ok tho!

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