Best way to compress a video file for burning a Bluray disc?

I just got an OWC Mercury Pro external Bluray burner that came bundled with Roxio Toast 11 Titanium.  I'm editing with
FCP6 as part of FCS2 and my version of Compressor is 3.0.5 so no "Share to Bluray" template is part
of the default options.
The default Compressor options are:
DVCProHD 720p24     (the footage was shot and edited using this codec)
HD DVD H.264 60 minutes
HD uncompressed 8-bit or 10-bit
I've also considered exporting a Quicktime .MOV file and letting Toast do the compressing.
Thanks for your help!

I feared you might come back and mention juddering. Is this more noticeable when panning?
Are you observing this from your Bluray burner into your Mac, or through a Bluray Player into a TV?
If from Bluray Player/TV then you may have to select the Motion Interpolation mode on your TV.
From Wikipedia
Names of motion enhancement technologies
The commercial name given to motion interpolation technology varies across manufacturers, as does its implementation.
Hitachi – Reel120[2]
Insignia – DCM Plus, for Digital Clear Motion 120 Hz, or Insignia Motion 120Hz
Kogan Technologies – MotionMax 100 Hz,[3] 200 Hz
LG – TruMotion 120 Hz, 240 Hz, 480 Hz
AOC – Motion Boost 120 Hz
Bose - VideoWave III 120 Hz (Not named)
Loewe – Digital Movie Mode (DMM)[4]
Mitsubishi – Smooth 120 Hz
Panasonic – Intelligent Frame Creation (IFC) 24p Smooth Film (24p material only)
Philips – HD Digital Natural Motion,Perfect Motion Rate[5]
Samsung – Auto Motion Plus 120 Hz,[6] 240 Hz, Clear Motion Rate 100 Hz, 200 ,HZ 400 , 500 , 600 , 800  (PAL video system), Clear Motion Rate 120 , 240 , 480 , 600 , 720 , 960  (NTSC video system)
Sharp – Fine Motion Enhanced,[7] AquoMotion 240 Hz,[8] AquoMotion Pro
Sony – MotionFlow 100 Hz, 100 Hz PRO (XBR series, Australia), 120 Hz, 200 Hz, 240 Hz, 400 , 480 , 800 , 960 .[9][10]
Toshiba – ClearScan 120 Hz, 240 Hz
Vizio – SmoothMotion [11]
Sceptre – MEMC (Motion Estimation/Motion Compensation)
I play around with HDV which is Interlaced , you are dealing with Progressive.
If I maintain the workflow as Interlaced then I do not get judder for Bluray via Toast, irrespective of Motion Interpolation ON or OFF.
If I export/Share in a Progressive mode , say 1080P AIC, then the only way to stop judder is to select Motion Interpolation on the TV.
Also I find that Progressive gives a slight grainy texture to the video which may be what some call 'FILM LIKE"
but I am not a fan of it's appearance.
As I maintain Interlacing in all that I do then I do not have to worry about what my TV is set to and more importantly nor that of any friends that  I happen to do Discs for.(not very often)
I have also played around in ensuring that I am judder free for any DVDs that I do.
The following give me judder free DVD for TV set to Motion Interpolation OFF .
DV interlaced into iDVD
HDV interlaced into iMovie (converted into AIC on import) Shared as AIC 1080i (size 1920x 1080 HD) then into Compressor-DVD Best quality and then into Toast for burning DVD.
I can of course use HDV in iMovie but the export used for use  in iDVD will give me judder if the TV Motion Interpolation is set to OFF but no judder if set to ON. And, strangely, exactly the same for iMovie HD 6 .
Is it possible that the majority of people who are satisfied with their iDVD videos  have their Motion Interpolation set to ON and those that are not satisfied have their Motion Interpolation set to OFF ?
Are you able to experiment with any Interlaced footage? Can your camcorder be set to record Interlaced.If so then you may be able to establish whether or not the issue is down to Interlaced versus Progressive.
Not trying to rub salt in the wound,( but trying to give you encouragement ) but it is possible to produce really good quality DVDs and Bluray.
Would be interested to know how you get on.

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