Points well made...
I may well have chosen a different container format (eg. mkv) if:
1) I had known about them when I began the project. Ignorance is not always bliss
2) If the loss in audio quality due to dropping the bitrate from 640k for AC3 to 128 or 160 AAC wasn't a more overwhelming change.
3) But most importantly, I have a lot of different devices that I use to play back these files. Many of those devices are made by Apple, and I wasn't interested in doing the amount of hacking required to get iPods, Apple TVs, etc. to playback mkv files.
4) I haven't upgraded to Nero8, so I don't think I have the passthrough option you've got.
But I'll keep my eye open on the m2ts container....I may yet switch, but as you said, TV isn't terribly demanding on the audio side of things. A show like "The Muppet Show" or even "The West Wing" just requires a good stereo encoding...
brad