H:264 capture/render software

I have been using Sony Vegas 9 to capture and render into MPEG-2 for one of the two stations I shoot for and all has worked quite well but there has been some talk of using high quality MPEG-4/H:264 and we want to do some test runs, I FTP the video and the H:264 will yield smaller file sizes as well which is good and since they now have the codec installed in FlipFactory (telestream) at their end I want to try it.

What I am looking for is a capture and render utility that will give me these award winning results in H:264, I have Google searched around and haven't come up with anything obvious and affordable yet, perhaps I am not searching hard enough.

We are still SD 720x480 NTSC and I tried the MP4 options in Vegas movie studio 9 and wasn't impressed with the quality.

I don't have to edit as they have editors at the station so the editing part of the software is not critical at this point.

any thoughts?

thanks
mark