Having two problems with version 0.96 on windows. One is new, one has been around since at least 0.86.
Input file: "source.wmv" (I have all these files in a zip, but I can't figure out how to attach them here )
Output files: "test v96.mp4 (produced by VLC 0.96, showing latest audio and video artifacts)
. . . . . . . . . "test v86.mp4 (produced by VLC 0.86i, only video artifacts)
System: IBM x31 thinkpad with all the latest drivers, codecs, patches. Video device is 1024x768x16 LCD driven by ATI Radeon (driver 6.14.10.6547). Audio device is SoundMax (driver 5.12.1.5410)
Player software: iTunes 8.0.1.11 or QuickTime 7.5.5 or iPhone 2.1 or VLC 0.96
Transcoder settings: transcode to mp4 file, with mpeg4 video codec and mpeg4/AAC audio codec
Video problem: extreme pixelation and lack of image in first second or so of video. This is not in the original file, but is an artifact of transcoding. Appears to me to be equally bad in both test files. This appears in all players, and has been with us for at least six months. Didn't see any discussion of it, but the forum search engine is acting very flaky today.
Audio problem: this problem is new, and only shows up on all apple playing software. When playing the Test v96.mp4 file on the VLC player, all the audio is fine. But when playing the same file on apple players, the audio is extremely choppy, sometimes dropping out entirely. Seems to be some sort of a buffering problem, where the audio is coming too fast (somehow) for the apple players to keep up. Did experiments with bit rates from 96 to 192 kb/s, always the same effect. This was not a problem on v0.86i on the same hardware.
If you want to look at the input and output files (the whole smash is less than 6 MB) let me know how I can get the files to you.