When I export MPEG-2 files, I use always the default settings, except for that I select PAL for TV Standard. I tried to set the Bitrate Encoding, but neither VBR, nor CBR was working (although with 1.7 CBR the file size was predicted as 1.5-2 GB – at the end of the process it became bigger than the original file).
For capturing I have a Leadtek Winfast TV USB II Deluxe, similarly there are not too many default settings that I change therein. Actually I don’t even know which features I should take care of, because I’m absolutely beginner in the world of video files. But I thought it could be something very simple to capture a file, then cut a couple of minutes and save it in the same format as recorded.