WMV sucks.
Make the switch to x264 and I guarantee people will flock to this thread to help you determine what's "best".
Also, x264 Psy-RDO/Psy-trellis should help with avoiding blocky video chunks in smokey and hazy scenes.
For starters, try MeGUI's (CRF) 1-pass Unrestricted HQ or Extra Quality profiles if you want high quality encodes.