4. Now open MeGUI, go to the tools tab and open AviSynth Script Creator. Open the M2TS file you created with tsMuxeR. A screen will popup, just close it. In the Creator, click the Edit tab and edit your size or resize. It should be 5 lines down and say "Lanczos Resize(640,272), just replace with your dimension (1920,1080) or (1280,720). At the bottom click save and save your script. The screen will pop back up, just x out of it. X out of AviSynth Script Creator and in MeGUI go back to tools then open the Bitrate Calculator. In the total size box you should click the drop down box and select your size to fit. Once you have selected your size, the Results box just below will give you a number that you should write down. (you'll need it later) Now X out of MeGUI.
5. Open VirtualDubMod and under file hit "Open video file via AviSynth..." Find your script you created and click it. Now under Video go to Compression and choose which one you want, then to the right click Configure. Here is where you set your bitrate that you wrote down earlier and click OK when done.(click OK again for your compression) Now under Streams, go to "Stream List" and click add. Find your AC3 file you converted and click open. When its done parsing, click OK. Back to File and go to "Save as". Name your Movie and click save. 4 to 6 Hours later you'll have your movie (Works Great on my PS3)
On a side note: I wrote this because i do not have one of the best computers and 32 to 36 hours for a back up was not a choice. I hope anyone finds this useful.
P.S. Thanks with all of everones help with my vc-1 problem