Converting Video for use in iTunes, AppleTV and iPad

Do you have files in Matroska Video (.mkv) and want to be able to use them without reconverting everything (many hours of processing time and quality loss) on your Mac, iPad or AppleTV?
Do you want to have true 5.1 Surround Sound  (Dolby Digital) on your AppleTV and it just seems not to work?
Do you want subtitles and/or dual audio and nice covers and chapters displayed on iTunes, AppleTV or iPad?

This is a small Tutorial to do all of these things using freely available tools.

We won't be reencoding de video (the audio maybe) so this will be a fast conversion process with no video quality loss and minimal loss in audio quality.
All we will do is reencapsulate the video in a format that iTunes ecosystem understands (and reencode the audio if necessary).

1 - To follow this tutorial you will need Subler and for some portions Remux.

So you have a file in .mkv (or mp4 or avi) and Quicktime/iTunes/AppleTV/iPad doesn't play it or there is no audio or not the audio you want.
There are different paths depending on what is inside your mkv file.
The .mkv file is a container inside it has among others a Video track and a Audio track, for your Apple TV to understand the file you have to change it's container but not necessarly the contents.
The AppleTV understands among others H.264 for video, AAC for stereo and AC3 for surround, 3GPP for subtitles, so if your file has DTS or AAC 6channel or no subtitles there is a few steps to do...

So let's go:

Most my files have:
1 - Video track 720p or 1080p encoded with H.264
2 - Audio track AAC 6 channel (5.1 surround)
3 - Audio track AAC 2 channel (Stereo ProLogic II)

But apple tv and my receiver don't understand 6 channel AAC so it uses the 2 channel track with prologic II
If yout file already has a AC3 6 channel track you can skip this step. You can also skip it if you don't wan't dolby digital.

So my final files should have
1 - Video track 720p or 1080p encoded with H.264
2 - Audio track AC3 6 channel (5.1 surround) - this is optional if you want Dolby Digital on the Apple TV)
3 - Audio track AAC 2 channel (Stereo ProLogic II) mandatory if you are viewing the movies on the ipad optional if you only want to watch movies on the AppleTV with Dolby Digital
4 - optional Audio tracks in a different language in DD AC3 and/or AAC
5 - optional subtitles
6 - optional chapters track

What can we do to fix this:

If your movie does not have a AC3 6 channel track you need to put one in and convert the movie to m4v, if it does have a AC3 track skip to the next section.
1 - Launch Remux
2 - Open you mkv (or mp4)
3 - On your aac 6 channel select "Transcode to AC3 384kbps"
4 -  on the dropdown menu select m4v
5 - choose a name for your file(ex "movie.m4v")
6 - hit GO

It takes aproximatly 4 minutes to do this on my Macbook 3,1 (time depends on number of tracks, lenght of movie and other things)
Success... This file is alredy set for iTunes/iPad/AppleTV but extra "work" can be done to make things even better

Next let's create the right audio tracks, add subtitles, metadata, cover art and chapters

1 - Launch Subler
2 - Create a new file
3 - hit the "+" to add new tracks to the file
4 - find and add your movie file (ex: "movie.m4v")
5 - select the tracks you wan't to import you will wan't the video track and the ac3 track.
6 - On the AC3 track select AC3+AAC (this will import the AC3 and create a Stereo dolby prologic II version AAC wich wil be playable on the iPad) then click ADD
7 - Click on the "enable" button on the AC3 track and then on the pulldown menu select the AAC track as the fallback audio
8 - Save as "video MPEG4" or add more audio tracks (different languages or audio comentaries) and then save

Subtitles:
1 - Get the subtitles for your video (opensubtitles.org is a good place to search)
2 - Click the + on subler select the subtitles file and add (you can add multiple subtitles).
3 - Change the language to the correct language of the subtitles on the dropdown menu
4 - Save (you can repeat the process to add more subtitles)

Chapters:
1 - The process is similar to the subtitles. Get the chapter (Chapterdb.org)
2 - Click the + on subler select the chapter file and add (only add one file)
3 - Save

Metadata and cover art
1 - Subler go to file -> import -> search metadata online (or if you have a file add this)
2 - If you search online subler will prompt you to select the correct metadata and then it will prompt you to select the cover art
3 - Save

To finish
Add to iTunes by dragging to the itunes icon.
If you have home sharing enabled you will be able to view this file on the networked macs (maybe also pc with itunes), Apple TV and iPads (iphones and ipod touch maybe also).
On the apple tv you can select the language and if dolby digital is selected in the settings it will pass the DD track to your receiver, otherwise it will use the AAC prologic II
On the iPad it will playback the Stereo AAC prologic but if you airplay the file it will use DD