Rygel installed through Synaptic

When I run 'rygel' from terminal everything appears to run as planned. It harvests the /Music, /Videos and /Pictures forders and I can play them on my Android devices (Using MX Player for the odd video formats). However, my Sony Media Player is very particular as to the types of video encoding it likes and chokes on most of the files I try to play.

I then edit /etc/rygel.conf to modify the lines for AAC_ISO_320, AVC_MP4, and GstLaunch all to 'true'.

When I run 'rygel' from terminal, nothing changes. It harvests the folders and I get the message: 'GstLaunch' disabled by user, ignoring... and I can play the files with client encoding only (no transcoding - so, not on the Sony).

When I run 'rygel -c /etc/rygel.conf it harvests the folders but I get the message: New plugin 'GstLaunch' available. From my Android, two Media Servers now show up: 'Gst Launch' and 'My Media'. Both from Rygel. The Gst Launch only has 2 built in files: Videotestsrc and Videotestscr with timeoverlay2. The My Media server has all of my files that again must be played with client side encoding, no transcoding.

Things that confuse me:
1. Rygel Preferences seems to make no changes to /etc/rygel.conf.
2. Running unswitched 'rygel' from terminal does not seem to call /etc/rygel.conf

A question I'd like to learn an answer to:
1. How can I get the rygel Media Server to transcode audio/video to an dlna compliant format so I can share them to my Sony Media Player?

Thanks for reading this entire thing,