One of the jvd feature that covered my eye.
i choose mencoder as priority convertor. If mencoder failed, jvd will use ffmpeg as backup convertor and vice versa.
I have the same situation as yours, I thought that mencoder has failed so it goes to ffmpeg. My solution is to reinstall mencoder, everything goes ok afterward.
I didn't realize that ffmpeg is the real problem.
I guess you have ffmpeg switched as priorty convertor, right.
here is the fix...
just replace /joomlaRoot/components/com_jvideodirect/tools/transformer/convertIt.php
from the new package
p.s. mencoder and ffmpeg both are excellent encoders. To choose between the two, we prefer mencoder if you plan to encode HD/HQ videos. Make sure you have x264 support in mencoder.