Issues converting mp4 to mpeg2

I am having difficulty converting client-provided mp4 files into mpeg-2's for use in DVDSP.
Here are the mp4 file attributes:
1280x720
23.98
H.264
square pixels
AAC audio 48kHz
My approach was to send these through Compressor 2, creating a 16X9, "best quality 90 min" mpeg-2's, for import into DVDSP.  When the result is played back in DVDSP, the image plays jerky and is full of digital artifacts. 
As you can see from below, I'm on a pretty old system, still in FCP 5, PowerPC machine, etc.
Can anyone suggest a workflow that might help me get these darn things compressed?
Many thanks in advance!

I've been testing this for years. I have no explanations, mostly becuase I don't care about the technology at work, just anecdotal experience and viewing the end results.
VBR seems to take a few frames to, for a lack of a better term, get back to normal and, with our particular settings at output targets, the results of this calcualtion activity is really ugly. CBR inflicts none of these distasteful artifacts.
Efficiency is not important to me, the only thing that matters is the end result. We've not bothered to explore VBR in a while because it takes so long, even with Qmaster running all procs, and the results have never yileded better  images than CBR.
We'll try it again as we change our targets to satisfy out IT wonks or we go to Compressor 4.
Welcome back, Hal.
bogiesan

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