This limits the amount of difference from the original frame that is allowed. The lower the Max Quantizer (or the higher the Minimum Quality) setting, the closer the compressed frame will be to the original. This will often increase the percieved quality of the video by preventing keyframes from being encoded poorly (which would lead to the video quality dropping for a long period of time).
This setting will override other settings in the VP6 codec, and can cause the video size to increase substantially, potentially causing the bitrate to go significantly above the target bitrate. To help keep the bitrate from going too high for good streaming, you should lower the target bitrate and increase the variability of VBR encoding when increasing this parameter - doing this will allow the codec to save bandwidth in other areas of the video so the keyframe looks good and the average bitrate stays reasonable.
When encoding HD video with this setting set for higher quality, you will sometimes get timeouts on the encode leading to every frame being encoded as a keyframe. To avoid this, encode on a fast machine and avoid any bottlenecks during encoding and encode (sample bottlenecks are USB hard drives and running other programs that use the CPU or hard drive.)
Technical terms - this setting actually controls the maxumum # of the Discrete Cosine Transform coefficients that can be dropped, and has a range from 0 (keep all coefficients) to 64 (allow the codec to discard all coefficients).
When this setting is called Minimum Quality, the meaning is inverted and the range is 0 (equivalent to 64) to 100 (equivalent to 0)
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