HandBrake

Well, the sad truth is, that the PS3 doesn't support AC3 tracks in MPEG4 containers. So, if you don't have an amplifier with a built-in AAC decoder that can handle multi-channel AAC, you have to stick with VOB (no fast-forward, MPEG2 big files), MP2TS (rather uncommon, MPEG2 big files) or AVI (only ...

After reading many articles, I found, that AC3 just isn't defined for MP4 containers, they just support AAC audio. What you can do is put h.263 video (that is XVID/DivX; not h.264) into an AVI container and add AC3 audio tracks. That usually works very well, even with older receivers that don't supp...