I use SUPER - it's open source, free, and not ad supported. Google it, it's by e-right soft.
Settings I use are:
Frame Rate: 23.997
Bitrate: 576-800 (Depending on type of movie)
Some will complain and consider that the lower resolution is a waste of the iPad's capabilities, but the above settings give full length movies in about 350mb-500mb each. Settings also assume you're using the iPad's screen, and not using video-out to a separate device.
For animated movies or CGI movies such as Avatar or Shrek, use a higher bitrate around the 700-900 mark. For live action with high movement, use around 600-800. For live action slow movement such as Shawshank Redemption or Austin Powers, safe around the 500-700 mark. Never drop below 500, it's far too glyphy.
As for audio settings, 2 channel 44100hz and 96kbps is more than enough for decent audio when using the speaker or a set of headphones.
When I make my own TV shows, such as Epic Mealtime in my own video podcast, I go balls to the wall and full on 1024x768, 23.997fps and 1000 bitrate, which usually nets each episode around 50-100mb, depending on length of video.