Acceptable quality when converting to MPEG?
 

I'm converting my raw Avi file to MPEG-2 to be burned into a DVD.

There is some loss in quality when I do the decode/render/conversion. Is this amount of loss normal/acceptable when going from AVI -> MPEG.

The image seems a tad blurry to me. There is no other issues with the conversion, no artifacts or tearing ect.

Decoding was done in Avidemux.

See the attached files for reference.

Best way is to use avisynth and lsmashsource decoder. I had bad surprises with avidemux or Tmpgenc AW

If you have access to a mac, there's a free app called "Burn" that'll convert really any input and let you choose the bitrate. It also creates the Mpeg files first so you can see what the quality is like before actually burning anything. It also does it super quickly - like less than 3 minutes for an hour of video if I'm remembering correctly. Worth a try since it is free, I haven't experimented with much else though on that front.