There are MANY variables in MPEG encoders. And there is a WIDE range in quality. I discovered this to be true in MPEG2 encoders, and I suspect we are just seeing the first of the MPEG4 and AVC encoders. Things are bound to get better.

Possibly better VBR encoding's coming soon?

:D No need to pay someone to do that, a real encoder will do it itself and better than a human.
It's just that the H264 encoder shipped by Apple is one of the worst on the market.

Try x264 (free) or the one shipped with Nero...

FFMPEG might be able to do the same with a plug-in.

I was planning on buying Quicktime Pro when I get my next PC, entirely for the purpose of H.264 encoding. I would have thought variable bit rate enconding and multiple passes would get over most of the hurdles of the crummy slider options in Premiere or After Effects using without the Pro package.

-Steve

No idea if this is relevant to this discussion, but FWIW: I shoot 1280x 720P in MP4 (not H.264) with a Sanyo HD1. When imported into a Mac Mini attached to a 60 inch HDTV, iMovie automatically converts it to Apple Intermediate codec to allow easy editing. When rendered, a 15 minute video comes out at about 1.75 GB. When this same video is re-rendered in H.264 by iMovie or Quicktime, I use the original 1280 x 720 resolution and the medium quality setting. The resulting H.264 video is about 200 MB.
I have spent a lot of time comparing the original to the H.264 on the HDTV, and can see no meaningful difference.

Until you try compositing/color correcting, etc. Then you see minor macroblocking and soft edging, or so has been my experience thus far.