1) Make sure you're selecting the MainConcept mpeg2 and not the "mpeg2" which is actually the Ligos encoder. Double check in the drop-down.
2) Are you selecting "mpeg2" in the Video Type drop down or "SVCD" or "DVD"? Try the latter options. There is a memory leak (at least in the original VV3 release) if you use "mpeg2" with any non-standard bitrate. I crashed several minutes into the rendering. Pull up the Task Manager with ctrl-alt-delete and watch the memory. If it climbs and climbs and the "available memory" gets lower and lower, this is your problem. Select the standard template from the top drop-down, don't change the bitrate, and make sure the Video type is not mpeg2. Report back :-/
Can you please provide as many details about the crash as possible (preferably on Win2k)? (i.e. the exact steps to create the crash and all details from the crash dialog.)