Plenty of hosting solutions can be found here: A sample clip that can be used to reproduce it would be very helpful. Because right now I'm not really understanding whether you're going DV->MPEG2->XviD or directly from DV to XviD.
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you could take a stab at turning off "chroma motion", and turning on "chroma optimiser". sounds like your camera has noisy blue... most do (though 1-chippers have it much worse, it's probably overwhelmed by the other noise). you could also try avisynth with a mild temporal filter on the chroma, ie: temporalsoften(2,0,5) that'll leave the luma alone, but give the chroma a fair bit of smoothing. shouldn't change the look of the video at all unfortunately xvid has a tendency to make noise swim about quite noticably. mathematically it "looks fine", but flat areas with mild noise can really jump out sometimes. [edit] disregard the above... (for now). i just saw your sample on a TV and computer screen simultaneously... there was no problem at all on the TV, meaning it's just the conversion to RGB at playback that's letting you down. try ffdshow with gradfun enabled and you'll probably get a nicer picture. btw, nice camera! i've seen much worse than that on commercial DVDs.
Try: tdeint(order=0) degrainmedian(mode=2) #or if too strong, try mode=3 As Mug Funky said, you can try a low luma degrain and a high chroma degrain. If you host a small clip of the original DV avi, we can try it also.
MPEG4 can still deliver the same quality as MPEG2 in one half to one third of the space. That's enormous compared to typical 800-1400 kbps rips you're probably currently aiming at, but it can still save you a lot of space, if you carefully follow , and note that first link and the batch file at the end of the thread. If you're willing to trade lots more space for quality, you won't have any of these shimmering problems, although you might want to get avisynth or another video processor involved to work on it. HDRAGC and perhaps the film look thread are especially useful with DV.
If you're having issues with a bunch of palm trees moving in the wind, I can tell you from experience that CBR 9800 DVD-Spec Mpeg2 probably wouldn't be able to cut it from a total quality perspective either. If you have such a scene handy, I can give it to CCE, Tmpeg, HC, and Qenc just to see where they top out.
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If you're willing foxy here's the link: It's short and not very sweet but source heavy. So you won't see the smears. And of course taken out of the linear context, I wonder if any isolated treatment might not distort the results a bit. But I'd love to hear your findings. A closer look at Teeg's thread had me asking what a Megui was. Ah, another new program to download. Just when I was settling in to Vdubmod. Whew. Dumb question but can h264 be 'read' in stand-alone anywhere outside of a computer at the present time?
On that dv sample i tried a bunch of codecs at 2500kbps and the best was the mainconcept h.264 codec v2 here is a sample of that. The inloop deblocking is off and with that on i believe any blocking still there will not be visable.
AVC can be read on PSP, video iPod, Xbox with XBMC, some palms and pocketpcs, hd-dvd and bluray players (it remains to be seen what sort of compatibility they'll have with non-dvd-compliant h.264, since hd-dvd and bluray are extremely restrictive in some ways). However, all but the hd set-top players are too slow to decode at 2500 average, or even 2500 peak. And of course any home theater computer would work, such as a mac mini. The xvid presets can be done in megui, virtualdub, or even henryhk's batch file, so don't feel you need megui for it. Downloaded, but haven't had a chance to encode yet. Beautiful, though, and I see why it tortures codecs.