I have a 3 hour long video that I need to put on Blu-ray. To date I've compressed all my video's to MPEG-2 for Blu-ray however 3 hours is pushing it a bit on a single layer Blu-ray? What compression would you advice? MPEG-4? I haven't encoded to MPEG-4 for BD-R yet so not sure what to expect.

Sony AVC, choose the template which fits you i.e 1080, 30fps, 25fps etc and thats it. Use AVC all the time as I find it gives better results and smaller file size.

I usually use the 1920 x 1080 50i 16mbps template.