I'll probably gets lots of hate mail for this, but for my fellow mac users: Handbrake .m4v to FCPX works! Just have faith! I kept thinking that how it appeared in the preview window was going to be how the end product looked...but apparently not! I don't know how, but when i imported an .m4v made by Handbrake (from a .VOB file) into FCPX it looked aliased and added black bars to the sides. HOWEVER...after exporting that unedited .m4v using FCPX's native .h264 compression, it looked exactly like how the .m4v was before the import. If you wanna be real particular, that end product you can run through some other software and whatnot.
Before FCPX (.m4v):
After FCPX (.mov):
Hmm, maybe i'll add a smooth/blur filter just to be safe....