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Best DVD-MPEG4 or H.264 app for OSX.4

I'd say just use Handbrake. Make sure to use an AVI container, MPEG4 compression using the xvid encoder. Its far better than te ffmpeg encoder.
 
Xvid/DivX is older and has been around longer, you'll find more encoding options and it will generally encode faster than H.264.

Keep in mind that Xvid, DivX, and H.264 are all variants of MPEG 4. DivX, H.263, and Xvid are loosely based on MPEG-4 Part 2 (the "original" MPEG-4 video codec). H.264 is the newer MPEG-4 Part 10 video codec, it's also known as "AVC" or Advanced Video Coding.

In my circle of friends, we tend to use .avi containers for DivX and Xvid; and MPEG-4 containers for H.264. My personal choice is H.264 via Handbreak.

(As a side note, "AAC", Advanced Audio Coding, is detailed in MPEG-4 Part 3, and MPEG-2 Part 7. Oldschool "MP3" is detailed in MPEG-1 Layer 3)
 
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