2.56 r7716 conversion result not as expected

[ABBrittain]

I've not getting the result I fully expect when I do convertions to Mp4. Attached are examples of the settings I'm using.

The Quant should range from a low of 16 to a high of 26 (these being as close as I can figure to an SD display standard), but it always seems to stay at a Quant of 26.

Can anyone advise has to if I have set this up correctly.

Note:- Covertion time is in the hours range (thats OK) and the file size is acceptable for DVD copies.