1/ do no ttype in caps, it's very boring to read and in internet world, it's assimilated to someone shouting ! You're are so mad about your encoding that you shout on you, aren't you ?
2/ NEVER change the setting to video+audio. The template do video only on purpose ! In fact you can do audio + video in some extreme case to avoid synch issue, but do not do that at for your tests.
3/ Are you video exactly to 23.97 (or 24) or something slightly different (23.96 for instance) ? If yes, the jerky problem comes from there.
4/ A VCD should be done at 29.97 (or 30) and not 23.97 (ot 24).and perhaps your player does not support video that are not in the standad framerate.
So you must encoded in MPEG2 and select in the vdeio settings of TMPGENC "pulldown : 3:2 puldown during playback".
Normally this should solve your problem.