Regarding the quality issue.
I'm giving this another shot - trying a new setting on Nattress Nicer. I'm setting the color sharpness to zero (instead of 90) to try and zap out those awful artifacts in the carbon freezing chamber scenes.
Results are promising so far.
That's the problem with Empire - this is going to be a better quality Classic Edition, but when watching Empire you really expect perfection. With ANH (or even ROTJ) the film is much messier, and in ANH especially people don't mind a low quality shot or a junky effect as long as it's within reason and looks ANH-like. With Empire, every little lapse in quality stands out and looks shocking. This is certainly why the Special Edition was done in a much more subtle and classy manner for this film - you can't get away with screwing Empire up.
The FCP scenes are a bit softer than the official DVD scenes (with more "full" color saturation in the unsaturated areas), but that won't be a huge issue if I can remove all these artifacts. The quality will be good enough to stand by.
Wish me luck.