Something you have to remember is that not all codecs in software are created equal. That is, not all mpg2 codecs output the same quality. For example Divx and Xvid are both mg4 codecs, but benchmark tests consistently show that Xvid has the better output.

You have to research your software based on output quality too. I have read that Power Director's mpg2 codec leaves something to be desired. You may want to skip that one.

Personally, I use Sony vegas 8.0.