While I would agree that CCE is probably the best encoder out there, I have to disagree that using it or another multi-pass encoder would drastically improve the video. Sending your raw capture straight to the encoder is going to be a hefty job for any program (especially at DVD5) with all the video noise intact. Multi-pass encoding would help, but really you'd only see a big reduction in macroblocking if it went DVD9 instead. (FYI, the X0 will be multi-pass CCE DVD9 unless something better comes along.)