Step 1: Starting and setting up a new project
Install TMPGEnc DVD Author or DivX Author - it's very straight forward, so you shouldn't run into any problems.
Start TMPGEnc DVD Author (TDA). You will be shown the "Start Project" screen. From the top right hand side, click on "Options" and select "Preferences". Go to the "DivX settings" section and click on "Video encoder advanced settings".
The "Performance" setting determines the tradeoff between high performance (low quality) and high quality (low performance). "Balanced" or "Better" should be good enough for most situations. The Bidirectional and keyframe settings can be left as they are. The "Bitrate control mode" slider allows you to tell the encoder whether to optimize for high motion or low motion - if your movie has lots of action, then you may want to adjust the slider towards high motion - normally, the standard settings gives you a good balance. Noise filter strength is best left to "None", unless your source is very noisy. For "Quantization type", select "H.264 (optimized)" for best results. I prefer to leave "Psychovisual enhancements" off, but other people swear by it so it's up to you. When you're done, press "OK" to close this window.
Back to the "DivX settings" section, some audio options are shown. These are the default audio settings. Under the "Format Change" section, you can select "Convert non-conforming audio as below" to make these options affect any audio encodings that does not comply with the DivX standard (if the audio does comply, no re-encoding will be needed). "MPEG-1 Audio Layer III" (MP3) is good enough for most situations - you can even use Dolby Digital, but it might be a bit of an overkill. The "Bitrate" can also be adjusted to lower/improve quality - 128 Kb/s is near CD quality, so it should be enough for movies (increase to 160 or 192 to get CD quality audio, but it is rarely needed for movie soundtracks). And finally, you can select a default language for the audio/subtitle, which the DivX player will play by default in the event you have multiple audio/subtitle tracks. The options I've selected in the screenshot below should be a good default setting. Press "OK" to close the options window.
We're now back on the "Start Project" screen. Select the output format, DivX Ultra NTSC or DivX Ultra PAL, depending on your input source. Usually, if your input is 25 FPS or a multiple of it (eg. 12.5, 50), it is PAL. Otherwise, it is NTSC. Make sure you TV/playback device supports the format you have chosen (say you have a PAL source, and your TV only supports NTSC, then select NTSC). Click on "Start a new project" to continue. You should now make yourself familiar with the "Options" button and the "Save Project" option - keep on saving your project at regular intervals, to prevent you losing your work or making a mistake which you cannot undo. Also keep a note of the output size bar at the bottom of the screen - there will be markers automatically placed for you at 650 MB (CD media) and 4.0 GB (DVD media), you need to ensure the purple bar (representing the current size of your DivX compilation) is not too big for the media you are writing the file to, be it CD or DVD. The actual size in MB is also listed to the right of the size bar.