These make a divx-encoded avi file that plays on a PS3, but I’m still working on the AppleTV:

Working steps to make PS3 playable AVI:

mplayer -ass -ao pcm -vo yuv4mpeg toradora01.mkv

mencoder -of avi -oac mp3lame -lameopts vbr=0:br=256 -ovc xvid -xvidencopts pass=1:cartoon -o /dev/null -audiofile audiodump.wav stream.yuv

mencoder -of avi -oac mp3lame -lameopts vbr=0:br=256 -ovc xvid -xvidencopts pass=2:bitrate=2500 -o toradora01.avi -audiofile audiodump.wav stream.yuv