My player (LiteOn 2002) doesn't support external subtitles, so I needed to reencode the movie "City of God" with permanent VobSub subtitles. Seemed like an easy task, done it before without much trouble. Only this time the quality of the reencoded copy turned out a whole lot worse than the original. During rapid scene changes one can see lingering squares (small and large) , clusters of them around the screen, which disappear after a second or two. Those squares are very annoying. The original movie plays perfectly smooth, no squares. I used Dr. DivX to reencode (which seems to be the simplest program to use for a newby like myself). Tried to produce the output of approximately the same size as the input, used default settings, then tried setting low scene change threshold, all to no avail.

When the movie didn't come out well with subtitles, I desided to try reencoding it without subtitles. The same result (weird lingering squares). Tried VirtualDubMod (same codec - DivX 5.1.1 with fast recompress and full recompress) - same deal.

Other movies encoded well. Any idea what am I doing wrong?