I think that the least amount of processing plus the higher quality / bit rate makes it look the best and most natural. I am hoping that the fluxsmooth and any sharpening won't be necessary in order for it too look good and fit on a DVD-DL disc. Using the 2P size method with the variable bit rate should give pretty good results hopefully. I think the first pass determines where all the peaks and valleys are and the second pass splits up the end result size and adjusts the bit rate throughout the encoding process.