I also use format factory for converting files, before that I used AllToAvi don't know which's better though (Format Factory is more universal though).
Mainly for convenience. Rather than set the files individually, i drag the entire folder into it and set the first file. Since all the animes are pretty much built the same, if i set the first file to h264, 2500kbps, audio track #0, subtitle #0. The rest of the videos will follow suit.
Handbrake has better compatibility (More control on the encoding profiles if you know what you're doing), but having to set it one by one (It doesn't select the right subtitles and audiotracks automatically) and adding your videos to a queue can be a pain.