much to my suprise, I have established that the problem lies with the audio passthru ac3 component, not with the xvid video component.
I ripped the same chapter from the same dvd in 2 ways : firstly as generic default (=xvid+Ac3), then again with generic xvid+mp3. the test chapter (chapter 2) from an xfiles episode, as its nice & short &
DVDfab says there is only a single AC3-2 audio stream on the DVD.
I put both output files into vista media centre & the 2nd format works OK!
the AC3 format sill works in WMP outside of VMC after it goes through its acquiring codec step, but not inside of VMC.
So I have been wrongly blaming the problem on xvid.
I then reinstallted acfilter v1.46 & retested but got the same results, so either I've configured it wrongly or I need to go google AC3 + vista for more clues. all I want is simple 2 channel stereo!
But this is progress, as I now have a useable dvdfab generic output mode for those clips that I want to put into VMC as video files, rather than as entire DVDs.