Hollywood can generally get away with much lower average bitrates because:

1) They are starting with incredibly clean source material
2) They use a very high quality film to digital transfer process
3) They use encoders that cost many thousands of dollars, and do a much better job - including multi-pass VBR (beyond just 2 passes) and the ability to go in and fine-tune problem areas (such as fast action).

As I understand it, the average bitrate for a typical hollywood DVD is in the 4500 to 5000 range.

The big problem I see with pushing the limits is associated with multiple audio tracks and subtitles - if you max out the video you don't have room left for much else (there was a recent post about someone how had subtitle drop outs because they maxed out the bitrate).

As far as the VBR stuff goes - I agree with what they have to say; that's the whole idea behind VBR - let the bitrate go up where the encoder needs it, and down where it doesn't. I generally get good results with single-pass VBR and the default values in the MC encoder; occasionally if I want to fit stuff on the disk without getting too close to the disk edge I'll drop down the average and go to 2pass, which seems to produce fine results.

--Scott