Encore freezes up during transcode in CS5

Hi,
I have a 2 hour project shot in HD (1080-60i). It transcodes to a Blu-ray DVD just fine.
However, when I try to produce a SD DVD using the same project, my computer freezes up: the transcoding seems to continue on the background but the mouse, keyboard and other programs freez up. The system shows that this happens when the utilized RAM reaches 11GB out of 12GB available. My set up is i7-930, 12GB RAM, 5 dedicated HDD with plenty of space.The only thing I can do is a cold restart as the keyboard is dead and Ctr+Alt+Del do not function.
Any ideas why this is happening and potential solutions?
Thank you.

Thank you folks for the tips.
Very helpful guide by Jeff on creativecow.net - thank you too.
Jeff, can you please share your opinion on the workflow that would produce better/more consistent results:
1. I'm going to cite one of the guys from your CreativeCow post: 'instead of just "send to encore" inside premiere and transcode in Encore ...it's better to encode to MPEG2 DVD in PrPro and then just start a new Encore project and import into Encore and burn...correct?' - is this the preffered workflow, or
2. I can use my HD project authored in Encore, select the proper settings to transcode it to SD in Encore (like 'Use maximum render quality') and come up with a SD versoin of my HD footage without sending the footage for down-rez to PrPro?
Thank you

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