:: DVD rebuilder & return of the king... dissapointing results...

I'd start with UnDot just to see what it looks like, and then start messing with the quality_prec again. If you extract the lines from Rebuilder.ecl that I mentioned earlier for just that segment, you can change it manually in the new file. For CCE Basic the line actually says pict_qchar=#. If you want to make it even easier, you can just change it within CCE after you load the ECL by double clicking the name of the AVS file. Just look near the lower right corner for the slider that says Flat Part Priority. You can set the number directly by typing it into the text box.

 

If none of that helps, it wouldn't be a bad idea to use Deen. It makes sense for a comparison since what Shrink is doing is smoothing the picture anyway, not unlike a denoiser.
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That's an interesting question. It's possible that Basic uses a different scale, just like SP 2.5 and SP 2.6x use different scales (DVD-RB takes the value for 2.6x and converts to the 2.5 value), but I've never heard anything that would suggest that's the case.

I just looked at a couple of projects I haven't encoded yet, and I'm seeing the same issue. One project was set to the default value of 16, but the ECL was set to 24. The other was set to 20, but the file says 31 so unless CCE Basic is using a different scale, they should be the same. Actually, come to think of it, that may be the 2.6x to 2.5 conversion we're getting.

Edit: I guess I didn't actually answer the other part of your question. After the Trim filter and before the ConvertToYUY2 filter would be where you want to add UnDot. The file would look like this:

Before you add the line, you'll need to make sure you download the UnDot filter and copy the DLL from the archive to E:\Program Files\AviSynth 2.5\plugins\ so it will autoload. You can find the download on this page:
http://www.avisynth.org/warpenterprises/

Edit 2: Apparently CCE Basic does use the same scale as CCE SP 2.5, so the values are fine.
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Well you know what they say - if you can't dazzle 'em with your brilliance....

Edit: See - a short post 8D
Mark it on your calender cause you might not see another one for a while.
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AviSynth isn't case sensitive so it doesn't matter.

It depends. Using LoadPlugin will guarantee it works because it explicitly tells AviSynth the location of the plugin. For most installs it won't matter as long as you put the DLL in the plugin directory (E:\Program Files\AviSynth 2.5\plugins\ in your case) so they'll autoload. Some people need it anyway, because sometimes programs hijack the registry entry for the plugin directory, which will cause plugins in the default plugin directory to not autoload. If that happens you'll know it because you'll get an error instead of your video.

I had a feeling that UnDot wouldn't do much, simply because I could see that the noise was at least mostly bigger than individual pixels. Unfortunately that's the price you pay for non-destructive filtering. It doesn't fix bigger problems. I think Deen is probably the best filter to use with it. I'd still leave in UnDot because it's probably removing noise that you may not notice, but which may still effect the encode (or just help Deen out a little). You might also want to set the Quant Characteristics (pict_qchar) back to 16 (24 if you're not changing it through DVD-RB).

Now that I've looked at the source material so much, and the noise is so bad, I'm going to have to look at my own copy to see what the NTSC version looks like.

 

Damn, good catch! I think you may have one of the infamous progressive sources that are flagged interlaced. That's what the Disable Interlaced option in the Advanced AVS Options is for. It's been reported that some progressive PAL sources are flagged interlaced (in the MPEG headers) and if you actually encode (or upsample chroma) as though it were interlaced that will cause definite quality issues. Being in NTSC-country I've never seen one myself, but when I look at the VOB you provided I don't see any signs that it's interlaced, and certainly it should't be, because handling progressive video that way (field blending) is strictly amateur hour.

I recommend using Disable Interlaced on this project and trying the encode again.

 

If you want to do it directly through the ECL file and the AviSynth script, change Progressive=0 to Progressive=1 in the ECL and change ConvertToYUY2(Interlaced=true) to ConvertToYUY2() in the AVS file. If that helps, you can start the project over again with DVD-RB and on the Options menu, go to AVS Options, then Advanced (Expert) Options, then Disable Interlaced and select Apply To All. This assumes that there aren't actually titles that are interlaced on the DVD, and I'm not sure if you're doing a full or movie only backup so I probably shouldn't make those kinds of assumptions.

Edit: Oops, you better change alternate_scan=1 to alternate_scan=0 in the ECL file as well.
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No, you can't skip the VAF file, but keep in mind that's really equivalent to the first pass in other MPEG encoders. It just doesn't write an actual MPEG file because that would be pointless when all the first pass is only calculating quantization and bitrates. The only way to do single pass VBR encoding with CCE is to get CCE SP, and evan then there can be issues with calculating the filesize because it's designed to give you a file of whatever size it takes to get the quality you select.