to 1) I use mencoder, cause :
-really fast on commom DVDs/other material
-I've used it a lot and know at least a littlebit what I'm
doing
to 2) ever tried kmencoder ?
But it is better to do it on the shell. You have more options, so you have more control. For encoding advices search the mplayer-mailinglist-archiv and the site of moritz. Before a week he wrote a really nice guide on bitrate/resolution/quality decisions.
transcode I've never tried, but if anyone would tell me it is fast, makes easy a good quality or have other arguments for it. Please speak, I would give it another try then.
Greets
Steffen