MMC uses Ligos GoMotion, which is entirely different from the Tsunami engine in TMPGEnc (the "T").
Two pass VBR will yield better quality than a direct MPEG capture, in most cases. It first analyzes the video, then encodes it based off the analysis. For an active MPEG encoder to do this, it would need a huge buffer, or some other means to see into the future.
Ligos is actually much better encoder, and is part hardware, part software on the card. The LSX encoder for the PC also uses Ligos as the engine, an older encoder, but still quite nice.
The easy way to fix MPEG compression artifacts on live capture is to pump up the bitrate a bit, and then to experiment with the IPB settings.
In actuality, the Tsunami has a way of softening the video, so it is probably just glossing over the same errors you saw from MMC files, just that MMC chose detail over softness.
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