Excuse me for piggy-backing on this thread, but Shawn: How would I specify PCM / Dolby in Encore? I assumed that whenever I transcoded, my WAV files were trancoded too. Have I missed something? Having read this I am wondering if I am unintentionally compromising on image quality.
Good Question. In CS3, it is in the Advanced tab when you begin a new project. In 2.0 it's, Edit/Preferences/Encoding. In CS3 Dolby Digital is the default. In 2.0, PCM is the default.
You probably aren't compromising too much in image quality unless you are really close to the limit of the disc. But for a comparison, a PCM/wav file is roughly 8x larger than a Dolby Digital/AC3 file. So a two hour piece that has a PCM file would require you to encode video at 3.46Mbps. This is below the recommended 4.0Mbps and will look terrible. On the flip side, a 2 hour piece with 2 channel, AC3 audio would encode the video at 4.75Mbps. Better, but not great. Even at 5.1 channel AC3, you could encode at 4.5 with no problems.
BTW: stay away from MPEG II encoding. I don't know why they even include that option anymore. So buggy with settop players.