The a/v sync is probably just a lack of precision in the Windows timer being used. I'll have to bump it up to some better code, that should fix the sync issue, but isn't very high priority. I'll try and get that fixed soon though.
As far as quality goes, it's actually (should be) better now, but it scales the movie to fit your screen rather than resize your screen to fit the movie (like retail does). That makes the compression artifacts show up in a more pronounced fashion. Try running with -noscalevid and see if that takes care of the quality problem.