Pulled off their FAQ site...
When I try to launch the GUI it says "Your system does not meet the minimum requirements for HandBrake...." ¶
Your screen resolution is too low.
Screen resolution must be above 1024x620.
Please note, we do not intend to support netbooks.
Obviously your system is hitting the minimum requirements because you can open the program. You're probably just a few inches over it though with just a netbook. I'm no genius on the subject of encoding because I've never done it. This post required me to some research, specially on the program you're using 'Handbrake'... Apparently it's hit or miss with this program. Some it seems swear by it, others not so much.
I'd assume what you're really going to be needing is some processor power, A fast reliable hard drive and a fast optical drive. You've already selected a decent CPU, and ODD. I would actually recommend this for your hard drive:
Newegg.com - Western Digital Caviar Black WD2001FASS 2TB 7200 RPM 64MB Cache SATA 3.0Gb/s 3.5" Internal Hard Drive -Bare Drive
If you can afford it.