Here is what I have learned and how to correct this problem.
The alternative tool I use is "Virtual Dub".

TMPGEnc apparently has a problem combining source files over
2gig in size. As you know when you are extracting a .wav file
for your audio it can be large. With a 2 hour+ movie the audio
can be over 1.2gig alone.

To correct this problem use "Virtual Dub" to cut up the .avi.
Example: I am making a SVCD and I want it on 3 cd's.
total frames 178397
cd1 frames 1 - 59466
cd2 frames 59466 - 118932
cd3 frames 118932 - 178397

use "Virtual Dub" to extract the first cd from the avi

file > open video source
audio > direct stream
video > direct stream

edit > go to (pick frame 1)
edit > set selection start
edit > go to (pick fram 59466)
edit > set selection end

now you have the avi selected for the first cd.
file > save as avi (rename)

extract the audio from this new file as .wav and then continue with
TMPGEnc for the editing. The file is now under 2gig and you should not encounter this error again.

This has worked for me and I hope you have the same success.

re's
Megafree