I use avisynth and x264 for my transcodes. For 1080i, I use this for my avisynth script:
DGSource - DGDecNV GPU-enabled decoder by Donald Graft
Lancosresize - I downrez to 720p
TFM/TDecimate - all 1080i videos that I edit are TV shows and are actually 23.976fps material that telecined to 29.97fps for broadcast. These filters recombine the telecined fields and then decimate the dups.
Removegrain(1) - very light spatial denoise
I then send that video through x264 with these parameters:
--crf 21 --tune film --keyint 48
I mux with mp4box.
My output is normally around 1gb for a 42min episode.