Best software to convert entire "VIDEO_TS" folder to iPod with menus intact

I know of various softwares that will convert various video formats to iPod, but the 2 or 3 that I have tried only allowed me to select single files. I would like to know what is the best program to take an entire VIDEO_TS folder and convert it into a format that the iPod can play. I would rather do this than take the VIDEO_TS folder and convert it into something else first like .avi etc, and then convert that file. My friend's iPod is a 3rd reneration (30 GB) iPod. Any help is appreciated. Thanks.