I too experienced some blockiness on some encodes.
I don't know if it's CQM-related or Trellis/B-VHQ-related though...
I've done 2 full test encodings of Matrix, with same XviD settings, using EQM_V3LR for one and EQM_V3ULR for the other.
Xvid settings was:
2-pass
AQ/GMC/B-Frames default values
MSP6/VHQ4/B-VHQ/Chroma Motion
Trellis
Respect VBV buffer unchecked
The ULR one showed some blockiness only on scenechanges (I-frames), while LR was perfect.
Just to have another example...
EDIT: the blockiness happens on ALL scenechanges with ULR, so P and B frames after every I-frame are affected by a side-effect, being these based on a bad I-frame...