Why the picture break up?

I’m using MPEG VIDEO WIZARD DVD to extract clips from VOB files and then creating a single MPEG file which looks fine. I can add transitions and it all looks smooth.

I then convert/encode the MPEG to a DivX AVI using SUPER and I get small but noticeable picture breakup on the avi file wherever I have added a transition and wherever I have added any text captions.

How do I stop this ?

Do you see these brakes on your Mpeg file playing it in software player? If not, I would look at different converter.

Part of the problem may be the way MPEG VIDEO WIZARD DVD works. It is probably re-encoding only at those parts, leaving the rest as-is.