Start up CCE, right click and select add. Then load the IPCServ AVI.
Then right click on the AVI and select edit:
Make sure the audio file is unchecked, then select the desired video encoding mode.
For VCD that must be CBR at a bitrate of 1150kbit/s plus the video format is MPEG-1.
For SVCD you can select what's being shown in the screenshot, that is MPEG-2 video and multipass VBR mode. Select between 3 and 5 passes (the more passes the longer it takes but the better the quality) and an average bitrate of 1500kbit, with a very low minimum (I take 300) and a max of 2500.
Isn't an average of 1500 a bit low? It might appear so but CCE's multipass mode is so good that you don't need more for good quality. I set the max lower than the SVCD max of 2600 in order to ensure that I never get any overflows.
Then click on the Video button..
Select all the options as shown in the screenshot.
If you have an NTSC anime or an Interlaced PAL DVD you'll want to disable Progressive frames as we'll be encoding this interlaced.
Set the aspect ratio to 4:3 since most players can't properly handle a 16:9 (S)VCDs (don't blame me if you set it to 16:9 and it looks screwed up in the end).
If you're interested about the meaning of each option you can look it up in the CCE manual which gives a great explanation so I won't even try to do a better job.
Then click OK and go tot he quality settings.
The more you move the slider to the left the more bits will be allocated the complicated scenes. I leave it at the default of 25.
A little noise filtering can't hurt either but don't overdo it.
Last but not least press on Matrices..
Here select the Ultra low bitrate preset. Don't worry, it has been made for bitrates of 2000kbit/s and lower. CCE is a DVD style encoder so the default preset is for DVD bitrates, around 6000kbit/s.
Then go back to the main screen by pressing OK 3 times at the appropriate positions.
All you have to do is to press the encode button now and wait till it's finished.