I've been testing out the new Xvid build 1.3.4 and getting really excellent quality at higher bitrates and enabling luminance masking in both 1st pass and 2nd one. Though I'm well used to h264 now and prefer it for lower bitrates, from my own tests I notice that at higher bitrates(1800+) Xvid retains much more facial detail(preserves film grain?) while h264 seems to still produce a glossier/smoothed over effect. All subjective of course and others may disagree!
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