Recommended Workflow for Converting from .avi to .m4v

I would like to take an edited .avi file and prepare it for playing on both iPods and in QuickTime/iTunes. I downloaded the trial version of PE7 to see if I could use it for this. From what I understand and have tried out, I can create an h.264 (MPEG-4, part 10) .mp4 file using PE7. What is the best way to convert this to the .m4v format? My OS is Windows Vista Ultimate. I tried using iTunes to convert it, but the resulting file did not play smoothly. I also tried downloading MPEG Streamclip and found I could not play the .mp4 file smoothly.
Am I sacrificing quality by starting with a tool that cannot export to .m4v, namely PE7?

Thank you so much. I appreciate your time very much. That link is quite interesting and will help me understand what I'm dealing with better.
I'm doing this for a podcast, so I need to have one file that will work for everyone who has iTunes or an iPod to include in the rss feed as an enclosure. I don't want to maintain two feeds.
So I think I'm going to try QuickTime Pro and hope that solves my woes.
I'm wondering now if I should still buy PE7 for editing. I like the product and have spent some time with it now. Of course, I wish I could do everything just in PE7 but don't think that's possible at this point.
So I still have a question about the workflow if anyone can help. Just to clarify, if I import .avi files into PE7 and do some editing, then can I just export to .avi and then open the new .avi file in QuickTime? Is that the workflow I would use? I'm assuming that QuickTime Pro can de-interlace the video, change the pixel aspect ratio, and allow me to make other adjustments to reduce the file size. I would export from QuickTime as .mp4 and hope that .mp4 files that QuickTime renders will work in the latest version of the QuickTime player. Otherwise, I'll have to export to .m4v, which I don't think can be used by other players???
Anyway, I think I'm on the road to a solution. Hopefully, QuickTime Pro won't have similar issues.
Thanks again for your time and advice.

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TSM:
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Recommended Workflow for eventual 1080p and 1080i output?

We have a show shooting on HVX-200's (at 720p60, 23.98), and also some HDV footage.
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We must deliver to two networks:
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Shooting/editing hasn't yet begun.
What is our best workflow?
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I have tons of experience with this workflow...and I blog about most of it. Here is a post that will enlighten you on a few things:
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Read more of the Sept and Oct archives for more tidbits. The Kona 3 card was a HUGE factor in this. Without it, with your Decklink, you won't be able to do what I did. You'll have to cross convert before you output.
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Recommended Workflow for Converting from .avi to .m4v

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