mabu wrote: But I have ffmpeg installed already.
But I don't see it in your DELEGATES file. So perhaps IM does not recognize it. But again I am not an expert, but I thought mpeg got recognized by IM from ffmpeg, but cannot say for sure.
So try using ffmpeg standalone to make your mpg file and see if it is an better. Perhaps you have more arguments to control by using it alone.
Or be sure it is installed fully and then reinstall IM and see if it shows up in your delegates. Look at your config.log file in the IM download folder and see if there are any errors when IM checks for ffmpeg.
Just some thoughts as I am not an expert on videos.