Best encoder available is most probably Cinema Craft Encoder (CCE), SP version is very expensive (US$ 1,950.00!) but a basic version suitable for consumers costs US$ 58.00
There are other alternatives, both commercial (TMPEG, Canopus) and freeware (QuEnc, etc)
A comparison test of various encoders from AVI to DVD-compatible format.
A freeware tool like 'The FilmMachine' may be suitable as it's designed for less experienced users or those who don't need to customise output so much. It can make use of CCE/Canopus or QuEnc for the encoding.