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I captured each side of the LDs as uncompessed AVI files (approx. 30-35 GB each) without any problems and my encoding is going well using TMPGEnc v2.524 with just one catch that is most noticeable during the opening crawl; it just isn't smooth and contains too much line crawl. Below are the non-grayed out settings that I am using with TMPGEnc:
Video Tab:
Aspect Ratio: 16:9
Frame Rate: 23.976 fps
Rate Control Mode: CBR
Bitrate: 8000
Encode Mode: 3:2 pulldown when playback
DC Component Precision: 10 bits
Motion Search Precision: highest quality
Advanced Tab:
Checked:
Source Range
Inverse Telecine
Ghost Reduction
Noise Reduction (set to defualt and high quality)
Sharpen Edge
Clip Frame
I really appreciate any help.