I have movies converted to .m4v using Handbrake. The .m4v are encoded with 'Chapters'. Played with the default iPad-3 video player, the movie chapters are shown and selectable. While watching, you can skip to the next/previous chapter using the on-screen playback controls.
I just purchased AVPlayerHD mainly because of the 'folder' support it offers. While that is dandy (and I wish the default iPad player would support), I am finding that AVPlayerHD is not supporting the 'Chapters', which is disappointing. Best you can do is fast-forward or backward. So are Chapters supported perhaps and this a case of 'user' ignorance? If so, can you please explain what I might need to do to get AVPlayerHD to support Chapters? Thanks.