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The only difference is that using AME requires more expertise to choose the correct encoding settings and is the only way to export 5.1 sound if you have the Minnetonka Surcode plug-in.
Thanks for that Harm
If you're a new user, another reason to encode in Encore is that you can lower the odds of double-transcoding.
We've often seen cases where people transcode in AME, bring them into Encore, and then transcode again, doubling the compression, and vastly lowering the quality. The trick, when you use AME, is to tag the clips in Encore as transcoded. They have to be the proper format in order to make this selection: 720x480 MPEG2 for DVD, etc.
In a single transcode, the quality should be the same, no matter which choice you make.
Another reason, AME sometimes gives an blue render, a know issue that I'm not sure has been fixed.
We output from premiere as the correct DVD format with presets we have created. Pal or Ntsc all should be an M2v file with an audio file.
When they come into Encore they always come in with the "don't transcode" (all ready transcoded) displayed.
We only use Encore to transcode when we need to compress large files down to fit on the disc. Encore does this really well.
Just to add: Encore can transcode using its own process, or, as of CS5, can use AME instead. (So the "automatic" can be used with AME as the transcode engine.) To use AME, you set a preference, and then must use the "transcode now," rather than transcoding during the build. Transcoding menus, motion assets, etc, is done only by Encore.
In the Encore forum, there are more users that prefer to transocde before bringing assets into Encore, but this is a moving target, as HD, SD, and HD to SD workflows are evolving.