Bitrate can be either. VBR is better if you have lower medium bitrates. CBR is better if you have plenty of space and adequate bitrate.
Example:
No action on screen, followed by action (car chase, sports, etc)
You need to put 3 hours on the disc. That limits bitrate to about 3400k. We'll assume 352x480 MPEG-2 interlaced footage.
At CBR, the non-action will be fine, the action will likely have blocks or artifacts. Constant bitrate.
At VBR, the non-action gets less, say 2000k, and saves the rest. Then the action comes, and it'll use that extra right here for 4800k. It's variable, not constant.
With VBR, 2 passes is better than 1. The first one in 2-pass will analyze. The second encodes. In 1 pass, it tries to do this all at once, and the results are not much better than CBR (not in Procoder).
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Sonic Solutions authoring software (like DVDIT!) requires closed GOP. Most authorware does.
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If you export from Premiere, you'll only be exporting one file, one movie. Single file mode.
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With interlace, match your source. For DV material, it is bottom field first interlaced. For more info on interlace, read this guide:
http://www.digitalfaq.com/capture/interlace.htm
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You continue to get the error in DVDIT because your MPEG-2 files are not encoded properly for DVD format. The MPEG files must have sequence headers. This should be turned on by default in Procoder. Be sure to follow the guide on PROCODER shown above, to the letter.
I'll be re-installing the software here shortly (mine got corrupted somehow) to see. In PROCODER full, it's easily found. In EXPRESS, it should not be much different.