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Heh. I wasnt aware there was a difference between encoding and transcoding... But thats probably because it might be different in audio and video, as I know more about audio then video.

But still, I always thought transcoding was just encoding something that was already encoded.

Like LAME is an encoder. You encode a PCM WAVE. Then transcoding would be to take another encoder (Vorbis, AAC, MPC, or LAME MP3 again, etc) and encode it again.