Noob looking for guides and advice

I have my first WD TV Live HD Media Player (WDBHG70000NBK).

At the moment I have it connected to a 1080p/120Hz display via HDMI.  I have my media on my wired desktop with XBMC and the WD TV wirelessly connecting.   The plan going forward is to connect to a PROMISE SmartStor NS4600 via gigabit but wires must be run and hard drive prices need to come out of the stratosphere so I can fill out the box.

Right now I am using DVDFab HD Decrypter to rip “MainMovie” to a VIDEO_TS.  Then I point HandBrake 0.9.5 to the VIDEO_TS folder on either the iPhone 4 or High Profile and spit out an .m4v.  I drop the m4v in a folder with the name of the movie (or .\Show_Name\Season xx\ in the case of TV shows).

My goal is to have a file that has as close to 100% of the video and audio quality of the original media, minus all the **bleep** that I don’t want like foreign language tracks, subtitles, bonus features, FBI warnings, commercials, previews, etc…  Hard drive space is not a concern.  I don’t stream to Xbox 360 or PS3.  In the short term, I will be sending audio from my TV to my receiver but long term I will replace the receiver and run everything through it.

In some of the conversations I’ve had, I have gotten the feeling that the guides I have been following are not targeted at what I want to do (they seem to be more interested in portability and universal playability) and I feel that I am not maximizing the media.

The more I read, the more lost I feel … I spent an hour reading “Anamorphic Encoding in HandBrake” and left still not knowing what box to check …

I use makemkv to convert dvds to mkv, quality is as close to the original as I can see on my 42" plasma