Hi thanks for your response.

I've not yet touched the encoding stage yet, I've not put it through TMPGEnc 3.0 Xpress. I have captured and imported 13 mins of DV Footage. Editing it down to a 4min 30sec Music/Video Clip. Now when I choose Export Movie and choose the following settings;

Export
Video and audio
Entire Timeline

Filetype
Microsoft DV AVI

Video Settings
Compressor: DV (PAL)
Frame size: 720h 576v (1.067)
Frame rate: 25.00 frames/second
Pixel Aspect Ratio: D1/DV PAL (1.067)
Color depth: Millions of colors
Quality: 100 (out of 100)
Fields: Lower Field First

Audio Settings
Compressor: Uncompressed
Sample rate: 48000 samples/second
Channels: Stereo
Sample type: 16-bit

....the playback of this movie file is very jerky, choppy and the slow motion stutters instead of smooth playback. When I edited it in the timeframe monitor, playback was very smooth. The thing is, if I now encode my saved AVI file that's very choppy, will it still be choppy when turned into MPEG2??? Is there something I am missing when I export it using the above settings??