I use avidemux and x264, imo, its the best implementation of H.264 spec which is actually part of the ITU, MPEG, or Moving Picture Experts Group, is responsible for the mpeg standards like Mpeg2 and 4 they collaborated on the h.264 and thus MPEG4 avc or MPEG4 layer 10, x264 is free, and so too is avidemux, it can be tricky at times to get everything to work, its not like any a drag and drop interface, it leaves some control over to the user which is why I like it, I have found that I can get better quality than some of the "easy-to-use" stuff, controls like motion search, quantization, and basic stuff like bitrate vs final size, is why I like it. doom9 has some nice tutorials on using both avidemux and x264 to encode, obviously if you intend encoding form a dvd you will need to first rip the dvd, DeCss it I use anyDvd Its payware but it is the best, you just drag and drop from explorer, then just import the decrypted vob files into avidemux...
Best thing about X264 is multi-threaded support. So if you have a dualcore machine it will encode quite fast, xvid also has some dualcore support but not as good as x264.
Very nice results, as mentioned it may take some more time to encode but it really is the next step froward, if you prefer old "MPEG4" type encodings go for xvid it is nearly perfect implementation of mpeg4 and the best by far when compared to divx and all those others...
Anyone interested in the type of quality x264 can produce and the speed at which their machines will encode, take a look at
http://www.techarp.com/showarticle.aspx?artno=520 But remember that is an HD clip that is being encoded, so it may take a while longer than say a DVD. Included in the package is also a very cool HD mtv add, if you wanted to see what 720P HD looks like
