Try converting again but using the default settings. I've been selecting the high-rez Ipod preset. This creates an MP4 having a screen width of 640 (for full TV viewing). Video bit rate for default is 1500 and audio bit rate is 160. You may be compressing your video file too much. What is the size of the video after you're finished with DVD Shrink?
Most of my conversions are done on my iMac, but I still convert a number of my children's movies on my Windows PC (single 3.2 Ghz CPU). A two hour movie with just a single pass takes more than 3 hours (about 2 hours on my iMac). When the PC version of Handbrake runs, you should see the command line window showing the status of the encoding. One hour for a full movie is too short.
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