[Victor Fernando Pagan] “I had tried the Quicktime conversion setting dv ntsc, also the Quicktime export as a self contained, and not self contained.”
Don’t use the Quicktime conversion method, as it adds an unnecessary generation of compression. You can simply change your sequence codec to ProRes 422, then use the export Quicktime movie method, either self-contained or not.
Try bumping up the average bitrate in BitVice, keeping the maximum no higher than 8.3 or so. I’m not sure how high you’ll be able to go and still manage to fit on a single layer DVD, but BitVice will show some improvement with a higher average bitrate, especially with interlaced footage. See if you can go up to 5.5 without going over your size limit. I have on occasion had to bump up the average bitrate to 6.5 on problematic footage, but you probably won’t be able to set it that high and still fit on a single layer DVD. BitVice is much better than Compressor at medium to low bitrates, so you may just be encountering the limits of what can be done given the nature of your source footage.
You might also investigate Innobits’ Video Purifier to see it it helps with artifacts in the blacks. There are also some noise reduction filters in BitVice that might be of use. You could always export a small sample of you sequence and do some test encodings using different filters and settings.
Good luck, and let us know how you make out.