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Might as well buy a hardware encoder. Procoder is *slightly* better than the M/C encoder that Vegas uses, on some sorts of things. Personally I like Procoder 1.5 better than 2.0.
But you wouldn't be buying a codec, you'd be buying an encoder.
If you're looking for "hollywood" quality from your home videos, forget it.
Hollywood starts with a better source, can encode on scene by scene or frame by frame, and uses high end hardware for great output.
Ditto what Spot says about Hollywood DVDs. They only have to encode 24 frames per second instead of 60 fields per second (assuming you are in NTSC land) so they can use more bits for each frame. Also, their material is progressive. Finally each frame is sharp, well-exposed and -- how do I put this -- professional. Even the best of us has a hard time meeting their quality standards.
If you use an external encoder, you will gain access to dozens of controls, some of which may let you get better results, but only if you take the time to figure out what they do.
There is TONS of information on this site about various encoders. Here are some links to a few of those posts: