I used Handbrake 0.9.9Using (64 bit)Handbrake 0.9.9 (64 bit) on OS X 10.8.4OS X 10.8.4 with iTunes 11.0.4. IiTunes 11.0.4, I encoded the same movie using the AppleTV 2 presetAppleTV 2 preset and also the iPhone presetiPhone's. It encoded successfully encoded the movie, generating two .m4v.m4v files on my desktop. II couldn't "Add To Library", though, Add To Library nor drag and drop into the library. TheyThey would play fine in QuickTime. Many hours of surfing later, the answer
The solution was dead simple: rename, rename them to .mov files. Voila. In they went
Voilà, everything worked.