If finally decided to do a bunch of encodes over the holidays to try and preserve the DVDs that my children love to scratch.
After doing a fair amount of searching here and elsewhere I settled on H.264 as the best codec to cover all of the devices (VMC, 2 360s, DMA2100, Zune, and an iPhone), toys, etc that I have especially given that we have a lot of DVDs and I don't want to have all the MPEG-2s on spinning disc.
After testing a few tools I settled on HandBrake for the encoder and have generally been using their Xbox Profile.I'm outputing to a .MP4 file extension, and the audio is AAC-LC. I wound up installing ffdshow, AC3filter, and Haali Media splitter to get all this to work - but I'm not opposed to buying any of the appropriate codecs if it will resolve the problems and get me better quality.
So I encoded a few things as a test:
A collection of music videos from DVD - I used a well know tool to rip chapters in to individual VOBs thinking this would allow me to select individual music videos, etc. The videos look pretty good and play fine on my VMC, 360, and DMA2100.
However - in VMC and on the extenders they lack the ability to fast forward, skip, etc, and when browsing they come back as unknown length. In WMP this is not the case and I can skip around using the scrub bar at the bottom - WMP also seems to know the length of the content.
I also encoded a few 44 minute kids shows and a few full length feature films.
These titles show "unknown length" when browsing, but when I pause the video it knows the length. I still can't skip around these videos in VMC or on the extenders though.
For all of this content the Zune software wants to transcode all the videos even thought the bitrate is around 2Mbps.