Sorry to have been gone from this thread for so long... anyhow...
The playback issue HAS to be with the PS3, as the power producer software DOES NOT appear to re-encode the video AT ALL, and when playing back on the PS3, the PS3 IDENTIFIES the audio signal as "multi channel dolby digital" when playing the disc and viewing the "information" bar (which also shows the video bitrate).
To the person with the modified satelite receiver: -The (most likely) reason why Power Producer is taking so long is that you have not patched the "1088" horizontal resolution headers from your mpeg file. Converting to an Mpeg PS (program stream) file will not make it compatible with Power Producer OR DVD Movie Factory if it is still a 1920 X 1088 video file. Use "HDPatch" to convert it to a 1920 X 1080, and the re-encoding will stop and it will burn "straight to disc"...
I have found that adding chapter stops CAN introduce momentary audio interruptions during playback. Since the PS3 has a 120X scan, I can live without the chapter stops. And, yesterday I ran into something that was REALLY strange. I burned some discs to BD-R's, and when checking them, I found that playback stopped just as the end credits started. I then checked the original file, and the credits WERE completely intact. I then played back the BD-R on the PC using the Cyberlink Power DVD playback software and, strangely enough, video playback paused at the SAME point, but the audio continued to play throughout the rest of the credit sequence. I had never run into this before, and have no idea why it was.
If only Sony would update the firmware to allow full 5.1 audio output from Mpeg files and BDAV discs, then we would be in really good shape. I still won't be completely satisfied, however, until the audio dropouts that appear to plague the beginning of video files during the "studio title information" segments have been COMPLETELY eliminated...
Lee