I know that a second pass in export gives better compression but my question is as follows:

Where I work, we do one pass at export. I assume that this is just to save time.
My question is, does a second pass ONLY help compression or does it give better quality to the final export?

What do you guys do? 1 or 2 passes?

My understanding is that 1-pass and 2-pass use different target bitrates.

1-pass is 7MB, whereas 2-pass is 4MB.

I always assumed that the 2-pass 4MB setting was one to use for particularly long projects that you want to squeeze onto one DVD. Because the quality setting is somewhat lower, 2 passes are used to allow the conversion software to 'get a feel' for the material, analysing it so that it can decide how to vary the encoding bitrates at the various points within the movie (eg, lower bitrates at static scenes; higher at the fast moving parts). You effectively get a finished movie with a variable bitrate.

1-pass 7MB settings should be chosen for shorter projects, where space isn't an issue. At this setting, the encoder is encoding at the highest quality throughout the entire movie. No analysis beforehand is necessary. You effectively get a movie with a constant bitrate.

Actually, this is not completely correct.

The settings I have is VRB 1pass, witch means that even though I'm using one pass, it's still a variable rate. The min is set to 1.5, target 7 and maximum is 9.

So the question still stands.

Well it shows what I know, eh?

To make amends, I found this rather useful Adobe resource....

Video options for encoding

I had always gone for 7 MB CBR.

I'm tempted to change to VBR...

I wonder what choosing the 4MB 2-PASS VBR preset would do if you altered the target bitrate to something much higher....?