Assuming that you have the full-paid version, and not the trial, look to see if Transfer Activation is grayed out?
Try Importing a simple MP3 Audio file.
It sounds like you have experienced the "revert to trial" of the full-paid version, so that you now have zero MPEG-2 support.
The steps to correct this are:
1.) Deactivate (probably grayed out)
3.) Run Adobe Clean Script CS5 several times, rebooting between each run.
4.) Install CS5
5.) Instantly update, before launching
7.) Launch and test.
As for Encore, you will love it. There is also a great Encore Forum, and a lot of helpful people there.
I also highly recommend Jeff Bellune's book, Focal Easy Guide to Adobe EncoreDVD 2.0, Focal Press. Though written for an earlier version, everything in the book will apply to CS5. For the additions to Encore CS5, they are all pretty much covered in the Help files. With one reading of that book, you will be up and authoring in no time, and will be unlocking most of the power of Encore. Jeff also has some neat tricks up his sleeve, that appear to bend the DVD-specs, and we know that one can't do that - don't we?