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Been using Handbrake since it's the fastest and easiest program for me to understand as I'm not a real A/V guy and I'm getting some under par results from it when it comes to TV shows.

I see episodes on torrent sites with sizes of ~175 for half hour shows and ~350 for hour shows and their in XviD but when I encode my DVD's with Handbrake with H.264 at the same size they seem to come out worse than the XviD rips on my HTPC.

I rip the DVD's with AnyDVD and then encode them using Handbrake with settings of H.264 .MKV with Loose Anamorphic and target size to which ever show I'm ripping and running the files on a external hard drive hooked up to a XBMC Live Acer Revo 1600.

These are my settings:

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What am I doing wrong?

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Please post your exact Handbrake settings (i.e. the ones under "Advanced"). Can you describe what is "worse" about them? Do they look blocky? Noisy? Blurry? –  slhck Sep 30 '11 at 12:30
imgur.com/z6w7w I didn't change any of this from the default as I don't know what any of it does really. "Worse" is overall blurry and with anything time there is a scene with anything moving fast, like the opening credits of Dilbert (the last show I encoded), would cause the image to go blocky or noisy. –  jonathanwash Sep 30 '11 at 12:45
Have you tried encoding using the two-pass option? Animated content is hard to encode, and usually those people that offer rips spend a lot of time fiddling around with the settings. If you have fast motion, use higher values for "reference frames" (as the tooltip says). You can then also try to set the motion estimation to "Uneven Multi-hexagon" and see if that works. –  slhck Sep 30 '11 at 14:03
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I just use the command line

handbrakecli --input input.mkv --encoder x264 --quality 23 --rate 23.976 \
  --strict-anamorphic --subtitle 1,2 --output output.mp4
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