Video = DVD(lavc)
Audio = AC3 (lav) In additon you need to set filters to enable resampling of 48K
Format = MPEG PS (A+V)
Don't forget to save the file with .mpg as the extension.
Using Avidemux 2.5.3, I found that the list of input codecs were not the same and had to use a different set of settings to get what I wanted. For this later version of Avidemux I used the following:
Video = MPEG4 ASP (AVCodec)
Audio = Copy
Format = AVI
This gave me a xxx.avi file which worked fine with VLC. I had some problems with Media Player - the sound synchronization with the video seemed a little bit off, but it was not too noticeable.
I tried several settings that gave me a .mpg file but these all seemed to have a bigger problem with sound synchronization.
When I used these settings
Video = Copy
Audio = AC3 (lav) with resampling at 48K
Format = mepg video
The synchronization problem was solved. But this file I did not use because Nero Vision Express, which I use to compile different movie segments and save or burn as one dvd file, would not read it.