If you need any assistance, drop by #x264 on Freenode.
I'm always surprised by how video startups--whose most important technical resource is their video conversion system--don't seem to do sufficient research into how it actually works (or for that matter, how well it actually works). This may be because of the assumption expressed in posts like http://news.ycombinator.net/item?id=933713: that all software is pretty much equal and it doesn't matter what you use or how you use it.
Then again, I can't be too harsh, because you at least used open source tools instead of Flash Media Encoder, so you must be doing something right ;)