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Just to round off this discussion...
Download Koepi's latest binary build, 1.0 beta 3 i believe.
It includes a zip of different quantization matrices with which one can experiment. Certain ones are tailored for anime, high bitrate, high compression, and "Ultimate" fit all.
Although Virtualdub converts to RGB, it doesn't affect perceptible quality and the decoder automatically converts anyways when viewing the file so the same amount of quality can be lost no matter which way.
Also, Virtualdub has a list of filter which are VERY useful for tinkering with the video, such as HQ Smoother and 2Dspaceclean.
My preferred settings are:
Cartoon mode, Ultra High, VHQ 1, no GMC, no turbo, no trellis, I (2, 31), P (2, 31), B(2, 31), max 1 consecutive b frame, Qpel, MPEG Custom with either Animation matrix or Ultimate matrix. And of course 2 pass with a touch of Smooth, warpsharp, and clean.
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