Indeed, this is a limitation, the amv's won't play in the software player, but I have no idea why. The files look almost the same :/. About the cubic pixelization, it's because of the matrices used inside FFMpeg. The version we used here uses the quantization tables for jpeg pictures, but the original one doesn't. I don't know for sure, but it may be possible to hack the original tables and have them included, but it's something that only the people at AMV-Coded-Tools can add as it's way over my experience. I'll try to further play with the settings, maybe a little blur would help minimize that effect.
P.S. I've sent you an e-mail with the new password. You can change it after you log in

.