Hi Captain Pike, and welcome to Piriform.
It's nice to see someone getting benefit from an oldish thread. I'm pleased it worked out for you, and the afterdawn site is a "Treasure Trove" of guides.
One important piece of information I can add to this thread, is that I have since discovered the cause of the lateral jerky movement I was finding in 99% of the DivX movies I converted to DVD Compliant ... Frame Rate!!
I'm in the UK where the standard frame rate for film is PAL, 25 Frames Per Second. Most of the DivX movies I was converting were in NTSC, which has a "film" frame rate of 23.976 (as opposed to the NTSC "video" frame rate of 29.970).
Once I had discovered the cause of the jerkiness, with some help from Andavari, I then had to find a way to convert NTSC 23.976 FPS to PAL 25 FPS.
The solution that's works best for me uses two freeware applications.
Avanti: This one originally posted by BrownSugar
For demuxing (separating) the separate Audio and Video files, and converting both to 25 FPS in the process.
This results in a slightly shorter movie due to the faster frame rate, and Avanti does this converting/shortening while at the same time adjusting the pitch of the audio track to compensate for the faster frame rate.
AviDemux: Originally passed to me by Andavari.
For muxing (joining back together) the audio and video files into a now 25 FPS DivX (AVI) movie.
There are other ways with commercial software, but this method, for me, produces the smoothest results playback wise.
The links above are for more recent versions of the software than the ones I'm using. I'm now updating, and if it's any easier with the new versions to convert frame rates, I'll post the details.