I'll see if I can get a sample somehow but its on all MP4 files, and when using the #--Transcode--# folder I have 4 options to choose from for transcoding, using the 1st setting I get the Chapter text, the 2nd setting which says MEncoder/AVISynth doesn't add it however it appears to change the aspect ratio for some reason and increases the letterboxing, I took 2 pictures with my Cell Phone to see the difference and to show the Chapter text that is added. Also the other 2 options which i don't recall what they were don't give me any audio playback so it's between the first 2 settings only. When I get home i'll take another look at it. And I just upgraded to 1.04 and tested and it was still there so I am not really sure what is doing it.
Core2Duo E8400 (@ 3.0), 8gigs of Mushkin, Vista Home Premium SP2 64bit, 2.5 TB of Space, Wired to Linksys WRT54G wired to 80GB MGS4 PS3 on Sharp 32" 720p LCD TV