Came across this app just the other day and thought "wholla!" just what I have been looking for...unfortunately anything after that was/has been a major disapointment...attempted to encode several .mpg and a .avi files with the intent of converting and burning them first to a SVCD which didn't work then a VCD and the result was the same.
The app took its time "encoding" which I had expected, yet despite my trying any and all options, it never once saved anything after the conversion process concluded. I had first copied the original video files to my hardrive and did the conversion with DivIllusion. The only thing that ever appeared or was saved after the encoding process was complete in any and all of my attempts was a empty "Video files" folder. Thinking that the DivIllusion might have replaced the original with the converted/encoded, I took the files that I had placed on my hardrive and dragged them into Toast. Toast then went through its own "encoding" process operating/acting as if they had never been altered at all (which I later found was exactly the case). I burned the files on a disc and I was able to get a VCD but the quality was very poor and in remembering the text instructions that came in the DivIllusion folder, I recalled that it stated that the quality one was supposed to acheive using Divillusion versus the Toast output was substancial. This led me to believe that the files that DivIllusion had supossibly "encoded" hadn't been touched and or saved at all. I then deleted those video files from my hardrive and instead loaded the original .mpg and .avi files from a CD-ROM directly into the DivIllusion application. This was the prove I needed as again DivIllusion went through the entire "encoding" process yet once that step was complete and no matter what option I selected in creating a VCD in which to burn or not doing anything or whatever be the case, not a single coverted file existed on my hardrive anywhere.