Woody on the forums pointed out that he can’t find the difference between 1-pass encoding and 2-pass encoding. So I did a screenshot comparison to show him the difference:

Like I said, 2-pass encoding is better, but you need to change your format settings. Two things to take into account: video bitrate and video resolution. The raw video quality is also important, but you already know that an encoder can’t improve the video quality.

Let’s say you want to encode a video in 1280×720 @400kbps, you’ll get the worst quality ever because the bitrate is too low according to the resolution (>= 2000kbps is more appropriate). And you’ll notice that the 2-pass encoding will be totally useless for the same reason. So increase the video bitrate according to the video resolution.

Also, by using the 2-pass encoding, you’ll get another benefit since the encoder knows exactly when to reduce the video bitrate: smaller file size.

To conclude, Tweak your format until you have the best quality / size you need.