Conversion from MKV to AVI/MP4 Artifacting

[SakuyaFM]

I've been trying to convert some MKV videos, and when I finally found tools to properly do it, I am running into artifacting. Blocks, freezing images, etc. I've tried opening MKVs in VDubMod in the past, but I have not tried recently because I keep running into file errors.

For my first batch that I was going to use for video editing, I used SUPER Encoder, no subs. I use Sony Vegas 9 for editing.
For my second batch that is going onto my phone, I used MKV2VOB to convert to MPG (and re-transcode for hardsubbing), then Prism Video to batch convert to 256kbps MP4.

Both of them are doing the same crazy artifacting.

HOWEVER, the videos coming from MKV2VOB are crystal clear. Sony Vegas can't even load thumbnails for the AVIs I got from SUPER, but the MPGs from MKV2VOB do. [EDIT: I forgot to mention that this specific video was not re-transcoded for subs]

As for the phone videos, mine supports (or so they say) MP4 playback:
"Video playback file formats: MPEG4-SP playback 30fps VGA, MPEG4-AVC playback 30fps QVGA, WMV9 playback 30fps QVGA, MPEG4-SP playback 30 fps nHD"
I get artifacts on my phone, but not on my PC. I'm guessing this is a bitrate problem?

[guns1inger]

What exactly are you trying to achieve ? Conversion to another format for viewing ? Conversion for extensive editing ?

Vegas is not designed to edit the type of footage normally put into mkv files.

Your overall process seems to be a continual stream of re-encoding using low quality encoders and lossy compression - all of which adds up to a continual reduction in quality at every step.

While you have tried to add lots of detail to your post, the actual point of the exercise is unclear to me. What is it that you actually want to achieve ?

[SakuyaFM]

I am trying to re-encode anime episodes that are on MKV so I can edit them for an AMV. I'm also trying to convert them so I can watch it on my phone/PMP.

Because the subs are softsubs, in addition to converting it for viewing on my phone, I'm trying to hardsub it.

[guns1inger]

If you need to edit it then convert it to an edit friendly format - either a lossless codec such as Huffyuv or DV AVI - then edit in Vegas, outputting in the same format. Using a lossless codec will minimise or remove entirely the risk of quality loss. Xvid4PSP 5.x supports conversion to Huffyuv in an avi container.

Once you have finished editing you can do you batch conversion for the iPhone. Again, Xvid4psp supports batch conversion to iPhone and other standard devices, as well as many other formats. It also supports a wide range of subs.

[SakuyaFM]

I tried doing a test encode to MP4 with XviD4PSP. I did add the subtitle files I extracted with MKVextract, and it showed up on the preview window. However, it did not show up on the actual video. What am I doing wrong?