AFAIK, dazzle has mpeg2 codec built in... but I'm no expert. As Aedan pointed out, notebooks aren't the best choice for video editing. Memory Bandwidth, CPU power, battery life, and HDD speeds will impact the performance and quality of video tinkering. Unlike most apps, the whole concept of overclocking comes in quite handy for games and video editing. In other words, video editing requires lots of CPU horses, memory size and bandwidth, and lots of HDD performance and size to do well. In a pinch, a high end notebook would work well, as long as it is not on battery.
FYI... for many, video editing was the killer app that was to push high end HW sales... never quite panned out for the industry, but anyone who has worked with digital video will tell you, the more power the better.
