Found the problem with bbmpeg. For some reason I had setup the dvd2svcd level to normal instead of advanced and it had screwed up the config.
Kwag, it tried .97 but now the file is too big. I'm not sure I am using the right matrix though. I loaded the ini files posted in this forum and changed the GOP as per your new recommendation. Would you mind refreshing the 2 ini files with the latest config?
BTW still no luck with the out of sync audio (it is a xvid with vbr mp3) and I think I tried all the recommendations on the various boards