Comment 8 for bug 578539

This is still a problem, but thanks to Jordan over at http://www.thisweekinlinux.com/ I now have a work around.

mencoder input.ogv -ovc xvid -oac mp3lame -xvidencopts pass=1 -o output.avi

This will give me working video that I can upload to YouTube or convert convert to another format using ffmpeg.