On my DVD's that I made with Encore there's sometimes a little pause between menus and transitions, it hasn't been a problem for me really, but now that I think about it, I don't remember having that problem with commercial DVD's,
so I guess it might be a problem with Encore.
Have you tried the encore forums?
This could be useless speculation (but what the hell): I've been reading up on DVD structure a bit, may be a case of a little knowledge being dangerous, but I know that there's such a thing as a seamless-flag between cells which span two layers of a Dual layer dvd, and I know that PGCedit can mess about with the structure at this level, so maybe that might offer some way of adding a seamless transition between menus??
Doom9.org and the PGCedit forums would be the place to ask about that.
Panasonic SD9, Panasonic NVGS-75, Canon MV600i