I upgraded my Production Suite in January this year from CS3 to CS4 and hit the Media Encoder brick wall (ie would not work or output anything!!!!!! - Hey £500 well spent - I don't think so!! - NOT a happy bunny - OK - I'll admit Photoshop is great as always).
I uninstalled after all the clean script waste of time stuff and went back to CS3 (which works great).
My question is this: Is CS4 working yet? Did they actually fix it?
I know some lucky people seem to have no issues what's so ever, but I got the impression I most definately was not alone with my Media Encoder woes!
Any useful thoughts or known timescales?
There has been an AME upgrade since January, but I guess the answer to your question is only going to have an answer that fits your configurration if you downolad it ang try again. Like you say, it works well for some but not others, so the only absolute answer is to try it yourself.