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Where are you getting the MPEG-2 files from? If you are capturing from another source directly as MPEG-2 then this may be a bad idea. I know that this will save a lot of disk space, but the files may not be DVD complient. If this is the case then they will need to be re-encoded which will cause further loss of quality. Where ever possible capture all files as AVI as this will cause little or no loss of quality, but will take up a lot of disk space.
Mark.
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Lexicon MC-8B. L/C/R: Blue Sky 6.5's, SL/SR/SBL/SBR: Blue Sky 5's, Sub: Velodyne DD-15
Panasonic NV-HS830, VTX-D800U via TiVo, Arcam DV29 & Sony BDP-S500 > Lumagen VisionHDP > Panasonic TH-46PZ85B. Marantz RC9200
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