MediaCoder

Unfortunately as far as I know, 2-pass has to be done continuously in MC, compared to other apps. Even if the passlog is not deleted, I don't think MC can find it if pass 2 is interrupted. But I may be wrong.

Sometimes 3 pass means encoding the audio separately, as I always do, then doing 2-pass video. I can only assume that if the encode is too large for the OP, that xvid is doing another full first pass, rather than a 3rd. I prefer 1-pass with quantizers, but these do not produce predictable file sizes...

I suggest using something like Virtual Dub that is free. You can load most files (non-avi with plugins) look at things frame by frame and try individual filters in Full Processing Mode. For noise reduction, sharpening, color correction etc.

Did you try 2-pass as the title states, or just 3-pass? Xvid uses 2-pass; other codecs may use 3-pass. Constant bitrate 1-pass is considered to produce the worst result.

2 steps, 2 apps:

Encode the audio only - AAC to AC3 with MC - I assume it picks the first audio by default.
Load original file and new audio in Mkvmerge, deselect the AAC, move new audio up as default and merge.

I would love to help further, but the last MC version I use is 4275. Manual Crop and Resize always works for me, although sometimes getting square pixels for some codecs or setting the DAR is tricky. Try to find where it is expanding to fit or disregarding the resize. Set the height as mod 16 = 800 ...

If you can encode the aac audio to ac3 by itself, I would not bother trying to mux it together with mediacoder. Try encoding the aac audio separately and multiplexing with mmg from mkvmerge. De-select the aac and add the new audio. This copies the other desired streams and adds the new ac3 into an m...

The DAR is 16:9 WITH the black bars. The desired video would be cropped like the last screenshot and stretched horizontally so the DAR is 2.35:1 or 2.40:1 = ultra widescreen = 1920x816

So MC is cropping but expanding to fit the original WXH.

You have to look at the VOB in something like DGIndex. That will show the original 720x576. If there are black bars, crop. If no black bars then just resize the video to WxH that correspond to 16:9 and set par=vga11 for xvid, or resize and set the DAR to 16:9. If you do not resize, some players will...

And they don't install or need the internet, etc, etc....