Not sure if this is related but a new discovery has taken place.
I wanted to convert all my VIDEO_TS rips to a container format to shrink file size. I opted for mkv using HandBrake. First few I created played nice on my desktop but had occasional stutter issues on my HTPC using WMC player with the Shark codec pack for mkv playability. PDVD12 also had the stutter at the exact same scene and time index I wrote down. I then did some reading and discovered the default Handbrake option to encode with "variable frame rate" is not advised for some. I tested setting the frame rate "same as source" and fixed. Stutter was gone and I tested a few encoded movies I did. The stutter did not happen on my desktop pc which has a Radeon HD 6950 while the HTPC has an AMD APU 3870, which has a built in Radeo HD 6550D. I wondering if the APU has trouble with any type of variable frame rate...does the PDVD player set frame rate as fixed? As I said not sure if there's a relationship here with the original issue I posted but it sure seems it to me so I'm reporting it.