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Yep there was another thread with this same problem. It was never really resolved.
DVDx 2.3 is what I use for ripping and compression (one step process) and usally to Xvid. If I use PocketDivXEncoder afterwards to compress it for PDA use it generally is fairly accurate. Possible it has something to do with the codec? Possible try re-installing your codecs after installing PocketDivXEncoder???? sounds stupid but maybe the links are wrong and it is using it's own encoder or something? DVDx is bang on the money every time and it is free and has heaps of options for resizing etc. Maybe it is best just to use it?
Just my thoughts...
Cheers
Adrian
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