We use FCP/DVDSP, but are not impressed with the performance of ANY of the available software MPEG2/AC3 encoders, one reason being that you can’t control audio levels during the encoding process.
For our workflow, we lay video back to tape, then encode via the Optibase Moviemaker 200 hardware MPEG2/AC3 encoder. The MPEG manager software inlcuded with the board allows you to adjust the audio input up to 12dB, which is more than enough to get you back to 0 (or -20 in digital audio) but we tend to ride our levels a little higher than that.
The boost in audio levels in the encoding process brings the DVD (AC3) up to pre-encoded levels, but does not introduce any extra noise.