This method belongs entirely to Thiras @ WarcraftMovies. I haven't played any part in figuring this out, my knowledge on actual rendering mechanics is extremely limited, and I take no credit for this at all.
As far as I'm aware Thiras' guide has disappeared into the depths of the internet when WarcraftMovies removed their article database. I've rewritten the instructions and taken all of the screenshots myself in an attempt to preserve it.
I've written this entirely from memory and haven't done a large amount of proof-reading or checking the steps, but I'm fairly certain that these instructions and settings should work fine. If you find a problem you can reproduce then let me know.
Download the Koepi XviD codec if you don't already have it.
Rendering your first pass
Project > Render As

Set Save as Type to Video for Windows (*.avi)
Next to Template click Custom...

Name the template at the top
Set Video rendering quality to Best
Go to the Video tab at the bottom

Set Frame size to (Custom frame size)
Set the Width and Height to match your raw video resolution. You can probably set the dimensions to anything of the same aspect ratio of your raw footage, but I personally use the exact dimensions.
Set the rest of the options to match.
Click Configure... next to Video format

Set options to match.
Click more... next to Profile @ Level

Set options to match. Click OK.
Move down to the bottom. Click more... next to Quality preset

Set options to match. Click on the Quantization tab.

Set options to match. Click OK.

Click OK again down at the bottom.

Make sure you've named your profile from the previous step. Click the Floppy Disk icon in the upper right hand corner to save the profile. This will allow you to access all of these settings on demand.

Back at the screen to save, make sure you're still set to Video for Windows (*.avi), and make sure the template you just saved is selected right below. Mine is called XViD WOW, yours can be whatever you'd like.
Select a file name and click Save. This will start your render. Keep in mind that this will not be the final file, so you might want to have some sort of naming structure. This method saves your video file 3 times, so I use underscores to separate them. My first render is MyVideoName__, second render is MyVideoName_, and final render is MyVideoName.













































