When I set an animation using format MPEG & mpeg-4 encoding, Blender 2.70 Official
changes it to mpeg-2 which creates a .dvd file (?)
Sometimes it will actually creates the mp4, though not sure why it does or doesn’t.
Most of the time I animate using jpg sequences if it’s critical, but for animations taking < 1/2hr I’ve been
having Blender just create an mp4 which is small, but plays well and virtually no loss in quality.
I’ve only had the problem with 2.70 Official. (the screen shot is of the gui set to mpeg-4, and the
I checked the output is actually mp4 though the gui says mpeg-2)
If I am rendering to a movie style output file I typically use MOV on OSX or AVI on Windows. On Windows I recommend installing the xVid codec and using that for MP4 output.