no problem, m8
just kill ReMpeg2 and use your *.m2v file to remux w/ ifoedit ... Note that the difference between 100% and 99% (in fact 99,9999999....%) is only one picture ... and the entire 2 hours movie haves more then 20.000 pictures...
So, i mean the mosaic effect don't results of this ...
Btw, U can tray CCE or TMPGEnc to reduce movie size w/ more quality than ReMpeg2