For the people who have observed that v.3 re-encodes streams which are already compliant, I'm interested in whether you can tell this from the results or from the length of time the authoring takes or from something else.

I use DVD compliant .m2v & ac3 streams which are correctly sized (ie. just below the TDA limit of 4,438) and the authoring using v.3 takes around 7 to 8 minutes. That short time made me think there wasn't any re-encoding going on ... but I agree that the quality of the authored DVD seems inferior to those authored using version 1.6 (using the same inputs).

So what is the giveaway sign that re-encoding is taking place?