The highest quality MPEG files require multi pass encoding. AE cannot do this because compression software needs to look at more than one frame at a time.
If you want the best option you should render to either a lossless or nearly lossless format. Most of the time I use Quicktime with Animation codec. Sometimes Black Magic 10 bit, other times Photo JPEG set to high quality. That files is brought into Encore, DVD Studio Pro, or any of a host of other programs for encoding for DVD.
The only time I ever render direct to MPEG out of AE is when I need a very quick copy for someone to review. When ever I do that the MPEG render is set up as an additional output module. This saves a bunch of render time. If the project is approved, the first render is already complete.
You can add as many output modules as you like by clicking on the plus sign next to the Output To:compName.mov in the Render Cue. Here's an example:
Thanks Rick that is very helpful! I did notice that Adobe Media Encoder allows for 2 pass encoding while AE only allows for one. From now on I will render a lossless file and then re-encode in Adobe Media Encoder. Thanks for the tip about additional output modules too. Sounds awesome!
Very good advice. For years I never new about the render module but now I use it constantly.
I would be nice if there was something like that in Adobe Media Encoder.