Okay, here's my attempt at an example to give this whole thread a bit of context. Unfortunately, these two images are from two different fansubbers but I still think it has some probative value. It's also a little hard to tell image quality of movies from a sample of stills but I specifically chose a high motion scene with large artifacting to bring out each codec's weakneses. Now, truth be told, this is more of a strobing scene than a fast motion one but I have personally found strobes to be problematic for compression. It's as if the codecs don't look farther than the last frame to calculate frame differences, although someone who knows more can correct me on this...
Now, I think there's little doubt which one represents the better image quality. One is done with h.264 while the other was done in XviD. The question is whether one is twice the file size better than the other? Is it? ...because that's the difference we're looking at!
Are your eyes bleeding yet?
I have a sneaking suspicion that the mere change to h.264 will get rid of the softness of the XviD image at the (relatively low) cost of the low detail background. I have noticed h.264 being very good at allocating information across a single frame...