what codecs/settings do YOU use?

Xvid is by far the best codec to use in my opinion.
As for settings you should always use 2 pass mode. The beauty of 2 pass is the first run is a dummy run that reviews and checks where more or less compression is needed. When the second pass is run it gives more bitrate to more demanding scenes. For example if you use 1000 bitrate at CBR some scenes will be good and some blocky. but using 2-pass all scenes "should" be good. Just trust me I have been encoding DVD, VHS to VCD and AVI for many years and the best methos is 2-pass and the best codecs are XVid and DivX5.

I use VirtualDub for my video encoding tool, I have found
the program DVD->divx to be acceptable to good quality
but not excellent, it is a far more easier program to use than the individual codecs and VirtualDub but with less quality.

Here are my basic settings for XVid
First Pass Settings:
Motion search precition - 6 Ultra High
Quantization Type - MPEG
FourCC Used - XVID
DivX5 Compatability - Yes
Default settings everything else

2-pass 2nd pass internal settings:

same as first pass settings +

Min I frame Q - 2
Max I frame Q - 31
Min P frame Q - 2
Max P Frame Q - 31

Discard first pass - yes
Payback Proportionally - yes

everything else default settings

Resizing and filters is another kettle of fish.

The best would be to download guides to help you

hope this helps

Opel Superboss, now that was a car!