Ah... i've just realise that Nero (6) does have these setting hidden away and i was always a bit afraid to tinker with em so I had it on Automatic (default) transcoder quality. The automatic settings are..."fast encoding-1pass" (or I could have chose "High Quality 2-pass VBR)"...
and audio was set to automatic but there are the options of "Dolby digital (AC - 3) 2.0" or "stereo".
Which is most suitable?
In reply to sleepless...The video plays fine on my PC Windows media player.
Thanks guys!