I think the problem may be with
DVDFab because while using the generic avi profile on the same video it doesn't matter what I change my bitrate to, the resulting file is the same. I even doubled the bit rate which put the bits/pixel over 5 according to DVDFab and the resulting file had a bit/pixel of around 265 according to gspot. When I tried the H.264 profile I got the results I was expecting but when I went back to generic and tried to encode the same episode, I get the same results no matter what the settings say.