The framerate issues seem to be resolved and while it's difficult to simulate the original titling without the original font and production tools I assume, I think you've done a good job under the circumstances in maintaining the effect and flow where you have made edits.
I can't really discern the multi-channel AC3 through my laptop's tinny speakers, but I can see it interleaved in the AVI container. I know that the Dolby Digital on WC4 sounds good on the right setup and it's very neat that you're planning to integrate it completely into the project in both the FMV and gameplay scenes. Had no problems viewing it, but would think that anyone having problems may need something like AC3Filter if you don't have an appropriate AC3 DirectShow filter or VLC installed.
The compression quality also looks fine; 2-pass ~1200kbps VBR Xvid should be sufficient for the resolution. Are you using a custom matrix or the H.263 or MPEG profiles? How are the gameplay sequences looking on your new PC? Anyway, good work.
Yes I forgot to mention the AC3 filter might be required. The xvid is using the regular h.263 unrestricted profile. As far as I'm concerned the gameplay footage is of good quality and the framerate seems perfectly smooth now. I'm really having high hopes now things are running smoothly. Thank you for your input, my Easter holiday break just started so I'd better get cracking with the project!