Alchemy of Encoding: Demystified

I use MeGUI 0.2.3.2116, I like its bitrate calculation, it makes me most comfortable.

My settings are pretty normal, I use mencoder to encode xvid with max 4 Bframes and I put it in cartoon mode, (I dunno if cartoon mode does anything).
I usually leave the mp3 untouched, straight extracted from the raw. I do the avs script with pretty much nothing, just the textsub.
My bitrate usually ends up in the 800-900 area, and in the end I use avimuxgui to make the final avi.

That is all, I do not do anything special. And VDubMod sucks for encoiding, its fine for editing.