I'm busy converting HDV (m2t) to Blu-ray, I'm wondering what would be the best codec to use when encoding for Blu-ray - MPEG2 or H.264? So far I've found H.264 to be troublesome, playback on my system is "glitchy." Everyone is saying H.264 is the future? What to do?

H.264 is twice as efficient as MPEG2 HD, so if you have a long project go with it, for now if you can fit your project using MPE2G HD at 40Mbps then that is still good, you might want to try another encoder if your current encoder is giving you problem encoding H.264

HDV originates at 25Mb/s. There is no sense in rendering it out at 40Mb/s. That's just a waste of space.

There are some peaks that will hit as high as 28 so you should render at at around 28 cbr. Or if you want you can even render in VBR at something like 28/25/15

As for going avchd... you can do this if you're short on space but generally speaking there is less quality loss if you stay with the original format.

For the record, When going to Blu Ray I render both my hdv and my avchd out to mpeg2 (much faster renders)

Yeah we know that HDV is 25Mb/s, but the more transcoding/rendering you do, the more errors you could get, so the higher the better and if he has the space then why not use all of it instead of leaving some gigs left on the disc unused.

I've decided to stick to MPEG2 for the moment, keeping my HDV to MPEG2 seems like a logical choice, renders are much faster, and less prone to compression artifacts I think.

Yeah we know that HDV is 25Mb/s, but the more transcoding/rendering you do, the more errors you could get, so the higher the better and if he has the space then why not use all of it instead of leaving some gigs left on the disc unused.

Higher render bitrates don't correct transcoding errors nor does it add quality. You just waste space and add to render times for no reason. It's much like converting 1440 to 1920. Exact same quality being represented by more information.

I've decided to stick to MPEG2 for the moment, keeping my HDV to MPEG2 seems like a logical choice, renders are much faster, and less prone to compression artifacts I think.

I would agree. I've played with rendered avc on Blu Ray and my opinion is that it's just not ready for prime time yet. If you can avoid it, you should.

Same here. I switched back from H.264 to MPEG-2. It was mainly because Encore CS3/CS4 are flaky in authoring H.264 bluray.

HDV originates at 25Mb/s. There is no sense in rendering it out at 40Mb/s. That's just a waste of space.

That's true if you don't do anything to your source video and just burn it to disk. The minute you do anything more than cuts-only editing you'll want a higher data rate. A cross dissolve will need more headroom. If you play with colors, do compositing or any such thing you'll want more bandwidth.

I used to have a Sony DVD player that would let you see the data rate from disk on a histogram. If I'm not mistaken Cyberlink's HD player will numerically display the data rate as a movie plays. If you have Premier, you can import a video file and look at the data rate in the Properties.

There are many reasons to encode at a higher rate than HDV. I always encode at the highest practical data rate. Once a disk is finalized, any space not use is potentially wasted, especially if you scrimp on data rate.

That's true if you don't do anything to your source video and just burn it to disk. The minute you do anything more than cuts-only editing you'll want a higher data rate.

Yes, this is certainly true, but a bitrate of 28 or so will suffice. At 40 though it's just a waste of space and added render time. Commercial Blu Ray mpeg2 disks may actually PEAK at 40 once or twice through out the film, and even with that I have only seen it happen on a very small handful of disks.
HDV (rendered or otherwise) just does not have the original quality or bitrate to warrant anything much over 28... or even 30 perhaps.

h.264 is a much more efficient codec. You can fit more video on a blu-ray disc using the h264 codec with equal or greater quality than mpeg2.

Burned media is less reflective than pressed media, and therefor cannot have as high of a sustained transfer rate. Store bought (pressed) blu-ray discs have peak rates that might go as high as 40 mbps, however burned media must have less than 30 unless you want problems with skipping. We typically try and stay around 25 just to be safe when we burn them.

Due to this limitation, you can achieve a higher quality video using h264, as the image quality can be increased much more before you reach the limitation of the media.

The only drawback to using h264 is that it takes much longer to encode (almost 10 times as long). This is why it might be a good idea to invest in a hardware h264 encoder like the Matrox CompressHD which can do it faster than realtime.

I use Adobe Encore religiously with my business, and I have not experienced any issues that occurred with h264 that didn't occur with mpeg2.