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Keyint can be up to 25 but then CPU usage is higher but bitrate lower. Keyint=1 is equivalent for best quality for lowest CPU usage when bitrate size is not problem.Keyint=5 is best optimum.vqscale=1
is/was not recommended because quality increase is not so high as bitrate so for encoding is not good because of its size.
But when you will not save it for storage but stream it on 1Gbit line to PS3, definitely it has better quality on HD videos(720p/1080p) where every bit is visible. Also this documentation is quite old so "undefined effect" was maybe in old versions of MEncoder but I suppose now it is more stable vqmin=1
has definitely side effects(on some videos with vqmin=1 buffer overflow is generated and video will freeze) so vqmin=2 is best optimum and also recommended.
So with good CPU and good line(100/1000Mbits) 5-1-2 or 1-1-2 is best optimum. Higher keyint, the better bitrate precision(lower bitrate/higher CPU load/no quality loss when no high values used)