Hi Roger,
If you start out with an uncompressed source, then compress it smaller, some degree of quality is obviously lost. However, if you start with a very highly-compressed format such as AVCHD, and then encode it at a higher bitrate, it's not really going to look any better than it did to start with. The image and color info that was "thrown out" during the initial in-camera compression is still not there. For editing purposes, one can transcode the camera file into a more robust codec that will hold up better through multiple generations of compositing, color correction. etc., but again that doesn't make it look "better" than what it was to start with, but rather only serves to maintain what quality there was to begin with.
Blu-ray does have a max bitrate of about 40 (audio and video), but that doesn't mean that 30, or 25, or even 20 don't look great - THEY DO! Most likely no need for a two-disc set. Use an online bitrate calculator and figure out the optimal bitrate for the length of your project, and export "H.264 Blu-ray" from AME and use that in Encore and it will not be transcoded any further.
I'd suggest a bit rate, but you didn't say how long the video is.
Thanks
Jeff Pulera
Safe Harbor Computers