Joey_21, the multipass encoding has nothing to do with recompressing the file.
The DivX codecs - 5.0.3 and above allow an easy to use method for multipassing any video.
What it exactly does, is emulating the coding of the video for the first try. This creates an unreadable avi file.
The good thing is that it also creates a log file that contains a lot of data about the video file you're trying to encode.
So for the second or any later pass, you can use this log file, or its updated version to shrink the file as small as possible without loosing any quality, cause for each pass the codec tries to better understand the video.
What do I mean under understanding? The codec is very much like VBR encoding an mp3 file - it tries to use the bitrate that fits best the ammount of data present at the moment.
The difference is that this time the codec doesn't try this by guessing what the file going to look like, instead in evaluates the entire file.
What's up to you know is setting the basic encoding bitrate I guess good results are between 750-1500.
Later you can set a manual slider to tell the codec what you think of the video's transitions.
As for the sound problem, my guess is that you've allowed your Windows Media Player to do an update kasperl.
NEVER EVER LET MEDIA PLAYER WANDER THE NET!
What happened is that it downloaded Microsoft's ADVANCED MP3 CODEC: ergo, you can't play any mp3 properly with higher bitrates.
Search for a Professional codec on the net - that should solve your problem.
To check your codec go into Windows' multimedia and check the Hardware Tab, inside that audio codecs.