Here is a simple step-by-step guide to walk you through what I did:

1) Install xvid, divx, and wmv codecs.

These can be found here:

Divx
Xvid
WMV

2) Install the automator actions for compressing and importing into iTunes.

Download Quick Time Compression Actions and Workflow

3) Once installed you will have a directory on your desktop called “QuickTime Compression Workflow resources”. In this folder you will find a sample automator workflow called “Convert videos and add to iTunes”. Open this workflow in automator.

4) Delete the first step of the workflow which is “Ask for Finder Items”. Instead of being prompted for which items to convert, we want to setup a folder action that will automatically convert the files dropped in our folder.

5) Add a new first step to the workflow called “Get Selected Finder Items”. This action can be found under the “Finder” application.

6) Under the “Compress QuickTime Using Most Recent Settings” step change “Choose directory for converted files” to the desktop (or any other temporary folder you want to use).

7) Create a new folder on your desktop. This will be your drop folder, so call it something relevant. I called mine “Convert to AppleTV”.

8 ) Back in automator, click on file and choose “Save as plug-in”, choose “Folder Actions” from the “plug-in for” drop down. Give the plug-in the same name as your folder. Select your newly created folder for the “Attached to folder” option. Click save.

9) Since the script will convert whatever file you drop in your conversion folder using the last settings you used in QuickTime you’ll need to launch QuickTime with a test file and then choose “Export” from the file menu. Assuming you have the most recent version of QuickTime Pro you should have an option “Export Movie to Apple TV”.

10) That’s it!!! Now just close out of everything and drop your files into your new folder and watch as they are converted and imported to iTunes. It works great to leave your Mac on and then drop a bunch of files in the folder before you go to bed. When you get to your PC in the morning everything should be all ready to go.

To find out more about folder actions, check this page out:

Folder Actions

1080p or 1920 x 1080 (progressive)
1080i or 1920 x 1080 (interlaced, which means only have the picture is displayed at a time)
720p or 1280 x 720
480i/p or 640 x 480 in 4:3 mode or 854 x 480 in 16:9

Anything less than 720p and you really can’t call it HD, it is just “enhanced definition” TV.

Here is a handy chart showing the various resolutions in comparison (taken from Wikipedia).

I pulled some screenshots from my iMac playing back an episode of the office. Here is a comparison between the standard definition and the high definition versions of the same scene. The first shot is the standard definition, and the second is the high definition. Click the thumbnail to view the full-size image.

If you look in iTunes at the info for “The Office” video files, it is reporting that the resolution of the “Standard Definition” version is 853 x 480 (or 480p) and that the resolution of the “High Definition” version is 1280 x 720 (or 720p). You can see some improvement, specifically around the text on the milk carton, but I don’t really see enough to justify the extra $1.00 per episode.

I’d really have liked to see Apple step up and offer content in 1080p. If they are going to lure me away from my DirecTV service and my DVR, they need to offer me something more compelling. I already get my shows in 1080i and will be getting them soon in 1080p form DirecTV. If they had come out and started offering 1080p content I would be buying all my TV shows from iTunes. As it is I can get higher resolution content for an arguably cheaper price from DirecTV service. Until they can get the massive amount of content, all available in 1080i or greater, I think I’ll stick to my current solution.