Most people don’t use PCM audio for DVDs because of file size concerns. It takes up a lot more space than the .ac3 file would, mainly because PCM is uncompressed over most of the frequencies. PCM is excellent quality, but should only be used if your .ac3 file is giving you noticable distortion. .ac3 will support surround sound. .ac3 files have very good quality considering that they are very compressed (bitrates can be 10% of typical pcm bitrates). Find a bitrate that works for your particular instance… 192kbps is common. I’m not sure if Encore gives you control over too much else, so I use other compression software, where you can control more features, like setting the normalization to -31 dbFS.