Important: Object type must be set to LC (Low Complexity).
256 is a great quality, but you are more than welcome to set bitrate to whatever you want. There may be many streams to choose from depending on how many languages your video contains.
Choose the audio stream you would like to keep.
Switch to the Audio tab and make sure it's set to General.
Beneath Audio Track 1, change Codec to AAC and do the same for Audio Track 2.
Beneath Video Codec, change Codec to MPEG-4 AVC/H.264.
In the lower half, you should have the Format tab selected.Drag the video you want to convert into the drop area.
Install Playstation Content Manager Assistant.
Playstation Content Manager Assistant - Required for copying files to your PS Vita.
XMedia Recode - for converting the video to an MP4 file so that it can be played on a PS Vita.