As part of continuing efforts to investigate nonlinear dynamics and stability of film casting process, our earlier results obtained by Lee et al. (2001b) have been extended in the present study to cover the film casting of both extension thickening and extension thinning fluids. The same instability mechanism and draw resonance criterion previously derived have been found valid here, and a rather complex dynamic behavior of film width in contrast to that of film thickness has also been confirmed. The effect of fluid viscoelasticity on draw resonance, however, exhibits opposite results depending on whether the fluid is extension thickening or thinning, i.e., it stabilizes film casting in the former while destabilizing in the latter. The encapsulation extrusion method which recently has been successfully employed to stabilize industrially important paper coating process, has been theoretically explained in the present study as to why such stabilization is possible.