Here's a list of observations:
1) You are using a very old version of FFmpeg, and it looks like you tried to compile FFmpeg yourself instead of downloading the latest, stable version via "apt-get install".
2) You appear to be missing vital codecs required for conversion. Notably, libmp3lame and libx264 are missing from your FFmpeg log file. Run "ffmpeg -codecs" at the command line to verify if these codecs are installed.
3) Looks like you are using an older versi0n of Ubuntu. It may not make any difference, but you could try a newer version of Ubuntu. (11.10+)
4) You could also try installing and using "avconv" package as a substitute for "ffmpeg" (for Ubuntu/Debian users). Please see this post
5) The majority of the PHP warnings/notices that you are receiving when error reporting is switched on are of no consequence and do not inhibit the execution of the script. That said, this particular warning might be the exception:
Warning: curl_setopt(): CURLOPT_FOLLOWLOCATION cannot be activated when in safe_mode or an open_basedir is set in /var/www/vhosts/XYZ.COM/httpdocs/converter/VideoConverter.class.php on line 232
You should check your PHP configuration. It is generally better to "not" run PHP in safe mode these days.
Also, an open_basedir restriction
could be causing problems if the restriction blocks PHP access to certain app directories.