You are being given MPEG4 files, which are highly compressed
The DVD specification is for MPEG2 files (as VOB) which are also highly compressed
You are re-compressing a compressed file
If you could be given a better source file, or one that is already in a DVD legal MPEG2 format, you should have a better DVD
That audio bit depth looks wrong too - 176.4Kbps is CD-Audio with Subchannels rates, yet we see 1 channel at 4 bits? I would throw this back & ask for LPCM audio at 16/48 minimum.
Traditionally & historically, XviD is a nightmare & best avoided if at all possible. Why? because it can - and does - play havoc with your installed codecs (likewise DivX).
It will need to get interlaced as well during transcoding - this will lose quality. Finally, the size is a funky one too - 1280x720 I have heard of, but 1280x972?
Maybe I am out of touch.....but this just looks wrong.