mka: My question is this: What exactly happens to the encoding when one changes the bit rates? Since the native video is 13.9 Mbps, do I really get better quality by encoding this at a higher bit rate? Since the bits are streamed faster for the same content, is there some interpolation going on? I don't want to waste time on encoding if it does not, at least in theory, produce better results.
In theory, a higher bitrate is better. But a person also wants to use expensive BD space to the max and efficiently. If the native bitrate is 14 mbps, raising the disc max bitrate to a higher rate will not make the video look better than the raw original, but might reduce the compression artifacts that might creep into the output as a result of recoding during disc image stream file creation. This issue needs some testing. Ideally, though, it could be skirted altogether by introduction of "smart rendering," which would mean no loss whatever and a much faster render time.
The honest truth is that the only way to know the quality impact is to burn a project at different bitrates and let your eye judge the difference when viewing the separate versions played back on a large screen. The obvious constraint is that a 21.8 GB BD takes just too plum long to render twice, and no fool will spend $10 for a 25-BD to burn a short project just to test the difference. The answer is to get two BD-REs and burn a short work at different bitrates on each, or else burn a project to two AVCHD-DVDs at different rates. To compare two m2ts clips in a stream image on a hard drive, at different bitrates, might be misleading, unless you use precisely the same player software as your disc player.
I recently burned a 4.5 hour AVC-BD at 15 MBS. I originally tried 19 mbps, but the 24.8 GB disc image was too big to fit on a BD-SL. The native files were AVCHD 1440x1080 60i, some at 9 mbps and some at 13 mbps. I compared the 15 mpbs version to a truncated version of the 19 mbps one. I saw no differences, although there were few action sequences in optimum light to afford an ideal stress test. I suspect the loss is negligible if one is working with video with limited motion, stills, or low light. The loss to any HD video may also be modest (or not noticed at all by lay viewers accustomed to SD) so long as the bitrate is at least as high as the native or above 13 mbps. Sports or action video shot in proper light should probably be exported at the maximum bitrate your disc space allows.
Sooner or later, someone should do a rigorous side-by-side test of the AVC and MPEG versions of BD projects at high, medium, and lower bitrates. The test material would best include varied video material presenting typical distinct lighting or motion situations. The trouble is, of course, that no one but a tycoon sets out to do anything short in BD.
I always wondered why creation of 24p output from 60i source would do any good at all. Your answer puts that to rest. What I still don't understand is whether 24p source video offers any distinctive charm, except perhaps better low light quality. Also unknown: whether 24p degrades more than 60i when recoded during disc image creation.