You said it all in the first sentance:
Period. No, all 3 apply no matter what program you use. When you convert from MPEG4 to MPEG2, you are devoling in terms of quality. You have to re-encode so it takes ages, and the simplest way is probably TMPenc.
And yes, buy people xmas presents you cheap bastard
Get her a cheap divx player and then something to play on it
