These are the features that would be welcome in the vlc's transcoader:
1. A better GUIed wizard with more options on the formats, bitrate, vbr/abr/cbr, timeframe, framerate.
2. Options for enhancing the quality(postprocessing?) of video, audio before transcoading.
3. Corping video as in a video editor, with ability to use a slider to corp video
4. Auto corp, to remove the black bars on the borders of some video.(dead useful in reducing the size)
5. Intelligent transcoder that tells the user that beyond a certain value for bitrate, the quality wont become higher because for the chosen raw file, this and that is the max quality
6. Option to suggest the user different codecs for different perposes, keeping in mind the size of video. for example - you may suggest divx, xvid, etc for dvd perpose, flv for posting to youtube, mp4 format for iPods, and H.264 + HE-ACC + MP4 for maximum quality and size reduction.
7. Ability to convert contentents of an entire folder to another format without increase in size and decrease in quality, and original file deletion
8. drag and drop interface for transcoading
9. intelligent wizard convertng a file to another format resulting in maximum reduction in size and no reduction in quality(automatically choose codecs, bitrates, FPS, etc along with container)
10. Information about usability of different codecs and lots of suggestions.
11. a help file
12. ability to split and join videos, audios
13. ablity to join even non similar videos/audios and combine them to a different format(useful with live recordings...
14. ability to specify what to do with each file(apply blah blah blah format/bitrate to one, halb halb halb format/bitrate to another, and process them all together(have dinner and see your job ready)
15. This is the best(and easiest) feature yet: save the settings for the output(for instance, you can save a setting for that 320Xsomething, 20 fps, 44 kbps HE-ACC along with 256 kbps H.264, for just suffitient to see template, MP3 mono audio 128 kbps for those with old mp3 players who share the earphones, etc
16. automatic file name extention for chosen container and option to choose the extention if more than one are possible for the same file(asf, wma & wm for windows media audio, etc)
17. Most Importantly, this feature must gain more prominence, as VLC doesn't prominently display this feature due to which many are in ignorance that vlc can transcode
18. VLC can be able replace audio/video tracks in a file? It will be useful for adding better audio to youtube videos
19. ability to apply equiliser effects to a file before transcoading.
20. ability to add subtitles into a file and then transcoading it.
21. ability to add/remove audio tracks and subtitles... the remove part is the most useful, as we can reduce the size by a huge amount.
22. Ability to create compresed files( ex: 7z files from waw files). useful for those wanting a wav coppy in their comp. (but I recomend flac...
)23. ability to save a transcoading job
24. if vlc could make it possible to add visualisations to audio it would be awssome, as you could have goom in your dvd player....
25. a tag editor, which edits multiple types of tags(real, vorbis text, id3, etc) will also be welcome. one can put in fresh tags to a transcoaded file, along with album art. this is much useful in syncronising different tags, as some files have multiple tags with different information
26. VLC can also have a transcode while playing option. this saves people from the boredom of waiting till the log transcoading job is over.
27. transcode all files from a playlist file.
28. if vlc can out put all converted files, from a list of files to a single folder in the same format, without we having to specify a file name and extention.
this is useful when say we have an mp3 player and drag and drop a bunch of audio or even video files to the transcoder's window and ask it to convert them all to mp3 with the out put folder being the mp3 player's directory. if this is used with the automatically detect minumum required bitrate for each file for no reduction in quality feature I requested, vlc can be a boon to all those people who have primitive mp3 players that play nothing other than mp3. No AAC, no OGG Vorbis, No WMA, No FLAC, No ATRAC, NO VIDEO TOO.
29. and now for a request that most will want: can a playlist be transcoaded while it is playing? I hate to wait 1.5 hours to rip a DVD, but watching the movie while ripping will be awssome. all I need is a load of popcorn and food, along with a more comfortable chair.
30. if you have noticed on a windows desktop, left clicking the mouse, holding it and draging it will produce a rectangle. can a similar methord be used to corp videos in vlc?
31. borrow code from OpenSource softwares like VirtualDub which have some features I asked for(thanks to hschulze for this one)
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If you have more suggestions relating to the transcoading capabilities of VLC, please post them here.
all I can do is to add more and more stuff here for personal pleasure 
sorry