Have a one hour foreign language film with English subtitles I want to rip and play on my iPod Touch with the subtitles.

What are all the settings needed to do that with HandBrake?

I tried it once with these settings (but got Format not for this device)

Format: MP4 file (should I use MKV?)
Video Codec: H.264 (should I use MPEG?)
Framerate: Same as source
Subtitles: English (only Burned In selected)
everything else default.

Thanks.