G'day akrein62
I too have been doing a lot of this type of encoding for my kids and I assume you have the same difficulties I have had with artifacts and mosquito noise. I have found convolution 3d very good for hiding this type of noise with these paramaters
Convolution3d (1,0,0,7,7,3,0)
Also people seem to be getting good success with blockbuster and fluxsmooth, Kwag has posted his settings for these plugins here
http://www.kvcd.net/forum/viewtopic....=asc&start=105
In my experience there is no perfect setting or plugin for these sources. I have found that trial and error has been my best teacher.