I have always used WinDVD 7 by Intervideo
. It's always worked well for me and has a nice Snap-in for Windows Media Center. This is the DVD encoder I use for my MCE machine that is in my home theater rack. It supports 7.1 Surround, as well as DTS encoding. I use the fiber optic jack on my motherboard to plug right in to my Sony 7.1 AMP. Never had a lick of touble with them.
I guess it all depends on how much you want to spend and the features you need. Since I have a copy on my MCE home unit, I just installed it on my Inspiron as well. I just re-installed the everything since I got a new 100GB 7200 RPM drive and wouldn't have though of installing any other DVD encoder.
Anyway... Thats my .02$. To each his or her own....