Please let us know - what is the purpose of the exported file? Archival backup?
With the MPEG-2 for DVD export, you will see a tab labeled "MultiPlexer" - go in there and change the setting and you will get a single .mpg file rather than .m2v and .wav, which are meant to be used in Encore and other DVD programs that will convert the .wav to Dolby AC-3 compressed audio. The other extra files are the chapter points and such, carried over from Premiere timeline for use in Encore.
For the "best" quality, if size is not important, an .avi file would probably be best. There are free codecs such as Lagarith that provide excellent quality, though with huge files (but smaller than uncompressed). For SD video, you might be quite happy with the DV codec, which is a good compromise of size and quality and is a standard.
But again, please share more info about source video, workflow, intentions, as there is no blanket recommendation for the ""best one-size-fits-all solution", all depends on your individual needs really.
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Check the PrPro Help file: http://help.adobe.com/en_US/premierepro/cs/using/WS3E252E59-6BE5-4668- A12E-4ED0348C3FDBa.html
Since it appears you are exporting SD material, use the MPEG2-DVD (which gives you a video and audio file separately) or the multiplexor as Jeff indicated. If you have the production suite, use the dynamic link to bring your video into Encore and it will transcode from there.
Be aware that the help file in PrPro is quite useful for this task, and others.
We all have our own favorite workflows for various reasons, but I choose not to use Dynamic Link to Encore when making a DVD. I just use Export from Premiere, choosing "MPEG-2 for DVD" format and an appropriate preset such as "NTSC Widesscreen High Quality". The only parameters I mess with then are CBR or VBR encoding, and the data rate according to my needs.
In Encore, I use "Import > As Timeline" and multi-select both the .m2v and .wav files. This brings in the content along with the chapter points from Premiere (the extra files you saw do have a purpose). By default, Encore will transcode the audio to Dolby AC-3 and the video will be left as is, so building a DVD from this point goes very quickly - just a few minutes on my Core i7 PC.
The only "issue" with making the MPEG-2 content out of Premiere is getting the data rate correct so it fits the disc. AME will show the estimated file size at the lower part of encode window when you change settings. I just use the formula 560/minutes=data rate. Got this from Adobe website. I do round down just a bit for safety, but for instance 560/120=4.66, so I encode at 4.5 and it never fails.
You may notice sometimes that the video and audio files combined will seem too big to fit the DVD, but remember that Encore will take the very large uncompressed .wav audio and compress to Dolby, resulting in a much smaller file.
Note that on short projects, the formula doesn't apply - the max encode rate for DVD video is 8Mbps, so that is the highest you would go in any case, though many recommend not exceeding 7Mbps to be safe and ensure playback compatibility with all players. Below 90 minutes or so, I would stick with CBR and save VBR 2-pass encodes for longer productions.
One more thing - do NOT multiplex the MPEG-2 file, keep the separate audio and video to make it easier for Encore to create the Dolby sound. If you create an .mpg file, Encore then has to start over to separate the content and re-encode it all!
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