Windows 7 - Xvid codec settings for smooth(er) playback?

I've been trying to get VirtualDub 1.99 & Xvid to get smooth, less blocky, looking fast action playback. I do not know a lot about Xvid codec settings, just bitrate really. I am trying to convert & upload some videos to YouTube and share with friends (FRAPS game captures). But during fast-ish action parts, it gets all blocky...big ugly blocky. When the action slows down, I can see the codec clearing up the picture, the blocks are getting smaller & smaller & smaller.

I've converted the same raw FRAPS video to H264/X264, and its is very nice, clean & clear. I would like it in Xvid/Divx for EZ compatibility playback on other devices (DVD players, Media Centers, portable devices).

I just use the Load Default settings, my bitrate at 1150 kbps, Packed Bitstream is off (some dvd players don't like'em packed)


What settings do you recommend/use for smoother/cleaner playback?

After playing around with Xvids Configuration, I think I found my problem/solution: Quality Preset - Quantization

Default settings (min: 1 & max:31)


New Settings (min: 1 & max: 10)


Same bitrate setting (1150), only 0.2MB change in filesize (12.9MB vs 13.1MB). So I tried setting min: 1 & max: 2 .. bitrate changed to 5200 kpbs (I didn't change it), and filesize jumped to 52MB. Image is much much clearer, I am going to play around with them some more to find a nice balance.