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Uninstall WinAVI. It is not a "pretty good" converter, it is monkey crap. Aside from the incredibly unreliable nature and average quality of the software, it's parent company indulges in periodic spamming of our forums, yet refers users of it's crap product to us for support.
There is also a very good chance that no matter what settings you use, WinAVI will not produce mpeg2 video suitable for use in DLP. DLP has standards, and WinAVI is prone to regularly producing non-compliant output.
In short, get a real encoder. Tmpgenc Xpress is better and reasonably cheap.
If you want free, try HCenc, and FitCD.Read my blog here.
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