
I could be mistaken, but I think the PAL version is a European format. That is probably why you see them pixellated, I have downloaded PAL formats b4 and my converter just codes them in NTSC which is the version you should be using on a NON-PAL dvd player. Hope I made sense.........it took me some time to figure it all out too.
BTW the program I use to convert my movies is Cucusoft AVI to VCD DVD MPEG Creator Pro. It has a lot of options, I can even increase the volume if I need to. PLUS.......it is very simple to use.
Hope I helped you with what you needed.