I found an old link for a program someone wrote to automate Handbrake. You pick two folders and put in some options, then any video placed in your source folder will be automatically converted to the settings you picked and placed in the destination folder. It also already includes Handbrake so you won't need to download that separately. I thought this may work a little easier for some.
Here's the settings for the "Handbrake Arguments" box that worked great for me on the nookcolor.
-f mp4 -e ffmpeg -b 1000 -a 1 -E faac --arate 44.1 -6 stereo
If you'd like to tweak these settings a little here's Handbrake's command line arguments guide: http://trac.handbrake.fr/wiki/CLIGuide
The only thing I haven't been able to do with Dropfolders or Handbrake is hardcode a .srt subtitle file onto a movie. I was able to add a .srt file into the mp4 container with Handbrake, and the video plays on the NC, but no subtitles.