dropzone, I think I know what it is. With FlaskMpeg, when you set the colors & everything to 20, it is like the soften block noise setting in tmpgenc. If you find it grainy like that at times, then use that setting at either 35 or 50 for both, depending on how blocky things are for you.
Another thing that can probably help, when you use dvd2avi & you hit F5 to check the movie... if says it is mainly film (in the mid 90% or above), then you should use Forced film setting in in dvd2avi before saving project. Also make sure the YUV>RGB is set to TV scale, but I suspect it mainly has to deal with the block setting in tmpgenc.
Hope that helps & CM will probs tell you better, however if your naked eye prefers the look of FlaskMpeg, then by all means I don't see why not to use it. It is after all one's own preference.