I have some divx movies stored on a network drive, I navigate to select them all point the destination to a local drive, and click on convert. if using 0.4.5.74 all works fine. if I use 0.48 (the latest) , a few seconds after I click convert it states it cannot create output folder and it goes no further. I've currently downgraded to the old version, so I can continue encoding files. I'm on win98se . any ideas anyone?

copy them to your local drive first. don't encode/transcode off a network drive...you're just asking for problems that way.

although I was doubtful that this was the cause, I gave it a go, but no thats not it.
v 0.4.8.79 still states can't create output folder. it seems to me v 0.4.8.79 tries to create a folder named from all the chosen filenames, whereas v 0.4.5.74 just uses the first filename. which in this case makes a folder name thats simply too long.

you can dictate the folder name when choosing the "save" path, can't you?

You are correct, if the tollal of the combined file names excedes 175 characters then it will error. I suggest you rename some files.