The quality of picture actually depends on the source, resolution and the bitrate used. Software can only help you to automate the process.
I can't suggest any other tools than wm8eutil.exe and GUI frontend. I think there's a way to export to WMV8 from Adobe Premiere but I don't know any software.
You can try my recommendation:
- Either follow the original video resolution or 384 x 288.
If you plan to go higher then you'd have to do pre-processing.
- If the source video is already blurry, try to clean it up & add contrast in virtualdub. Follow Quu's guide on how to cleanup video game footage, and then resize it to the recommended resolution.
- 500kbps / 88% quality vbr, 1/2 size buffer, 10secs keyframe distance.
Recommended bitrate range 500~900kbps, or 88~95% quality VBR. Still, you'd have to experiment to find out the optimal quality/compression. Try with the minimum constant bitrate first, and then increase by 100k. Once you're satisfied with the result hit straight to the two-pass/vbr encoding.
- As for the audio: 32~44.1kHz 64kbps mono or 2ch
If you don't have the time to play around the settings (encoding in WMV8 is very time consuming, I know) you can just follow the system profiles provided by wm8eutil. Try one of those near-broadcast quality or vbr.