When many artifacts occur in my VCD mpg test-result (using TMPGEnc) I'm doing this wunderfull trick:

I open the AVI in VirtualDub and select the video filter 'Resize' with following parameters
- New width : doubling the orginal
- New height : doubling the orginal
- Filter mode : Precise bicubic (A=-1.00)

Then I framserve to TMPGEnc and I have an nice clear and still scharp movie (even when it is captured in lower resolutions like 352 x 288/240).

Whats happend behind:
When scharp objects are moving over the screen artifacs will occur.
Soften the image by doubling the size will encoded in TMPGenc in that big images and after than downsized the size that you specified in TMPGenc video settings and your scharp movie is back.