I apologize for the recompression to JPEG as there is some additional loss in these files from that. However, it will still show what I am talking about. These pics are zoomed in from one of my recompressions (King Kong).
Here is the source:
Here is the results of cutting the file size in half using a professional encoder (CCE Pro):
Here is DVDShrink taking a stab at it using its best encoding options. One thing you will notice right off is the ugly 'blocks' that it has chopped the image up into:
