I mostly use an OsX application called Handbrake - one stop ripping and encoding. AFAIK there is now a Windows version available called mediafork.Thats good to know, is the quality better and file size smaller as well? What application are you using to encode with h264? I would like to give it a bash.
These screen captures should give you an indication - http://www.xile.net/xvid_vs_x264/