Background :
Win XP (fresh install), Intel 1.6, ATI AIW, VirtualDub 1.4.8, 512 MB RAM, 40GB HDD, NTSC source, Panasonic 2.51 (standalone).

I've captured the video from my Hi8 Sony using VirtualDub in AVI file (~29GB size). There were no filters/compression. I just had 2 frames dropped for the entire clip. Then I start encoding the AVI using Panasonice MPEG Encoder 2.51 to MPEG-1 (1500Kbps). The total file has 89,924 franes. The encoder would do till the frame 12796 frames and then aborts with the message "Cannot get a frame data from the material file. Encoding aborted". I've even tried to encode from 12,900 to 89,923 frames. I still keep getting the same message and I was not able to encode the AVI that I've captured.

What should I do in such a situation ? The reason why I got this software is : the encoded quality is excellent. I could see better results than anyother encoder.

Any help is greatly appreciated.

PS : The captured AVI is 352x480, 29.97 fps. Even frameserving from VirtualDub also did not work !