x264 for video (if you don't know command line, google a GUI for it)
AAC for audio (nero's not bad...)
.mp4/.m4v container
And there's tons of programs that can try to automate this for you, like MeGUI, HandBrake... etc.
I think even Zarx264gui might work if you use level 3.0/Baseline.
Now, it's worth noting that if you are going to dl any type of converter, try to get one that doesn't mess with your codecs/registry.
If you don't know what that means, be sure to re-install
CCCP afterwards in order to fix anything the converter may have broken.