Amazon transcoding services

This feature from Amazon seems pretty attractive, especially the free 20 mins per month which is about all I need.

I have a powerful computer [i7-3770K] but have nothing but trouble in transcoding Youtube H.264 videos into Mpeg2 for VCD generation without getting audio synchronization issues in the final output.

Does anyone know of good free software which can go from H.264 to MPEG2 VCD while maintain the audio in sync? Would HandBrake do this well?

Thanks,
Fabian.