I know the definition of these frames, but how will they affect the quality of a PAL VCD if changed in render settings? I mean, what setting willl give me best quality.
Increasing the frequency of I-frames will not improve quality. B-frames take advantage of the information in future and previous frames thereby requiring less bits to store information about the frame. So, B-frames compress better than I-frames. Since the bitrate is limited, increasing the frequency of I-frames will mean the quality will need to be decreased to accommodate for more I-frames.