Conversion by changing video resolution results in a bottom rainbow strip

[usta]

I have converted a video file and noticed in the output video that the bottom is messed up (see the picture). On a full screen, about 1cm is fulled with rainbow colors. Does anyone know the reason of this problem?
Here are some statistics (the conversion was done using Xvid4PSP):

Input file:
Video
Format : MPEG-4 Visual
Format_Settings_BVOP/String : Yes
Format_Settings_QPel/String : No
Format_Settings_GMC/String : No warppoints
Format_Settings_Matrix/String : Default (H.263)
CodecID : DIVX
CodecID/Info : Project Mayo
CodecID/Hint : DivX 4
Duration/String : 1h 22mn
BitRate/String : 760 Kbps
Width/String : 640 pixels
Height/String : 264 pixels
DisplayAspectRatio/String : 2.424
FrameRate/String : 25.000 fps
Resolution/String : 24 bits
ScanType/String : Progressive
Bits-(Pixel*Frame) : 0.180
StreamSize/String : 447 MiB (66%)

Output file:
Video
Format : MPEG-4 Visual
Format profile : Simple@L1
Format settings, BVOP : No
Format settings, QPel : No
Format settings, GMC : No warppoints
Format settings, Matrix : Default (H.263)
Codec ID : DX50
Codec ID/Hint : DivX 5
Duration : 1h 22mn
Bit rate : 996 Kbps
Width : 480 pixels
Height : 272 pixels
Display aspect ratio : 16/9
Frame rate : 25.000 fps
Resolution : 24 bits
Colorimetry : 4:2:0
Scan type : Progressive
Bits/(Pixel*Frame) : 0.305
Stream size : 586 MiB (85%)
Writing library : Lavc52.0.0

[poisondeathray]

When you play the input file in a directshow player e.g. MPC do you see the same result?

Maybe try another converter like avidemux, or virtualdub

[jagabo]

My guess is the Divx 4 decoder isn't handling the mod8 frame height very well. Try using a different Divx 4 decoder.

[usta]

Thanks guys. This conversion was intended for a portable media player, and yes, the input file plays clean.
I have converted the same input video using Handbrake (Video codec MPEG4, 480x272 resolution) and the result was fine.
Looks like these software are using different built-in codec libraries, that handle things differently.
Good thing that we have a choice in various type of software and codecs...