Just wanted to follow up to say that iDVD proved to be useless with this task.

The biggest issue right off the bat is that it doesn't seem to be working properly. The theme layout appears all black so I can't see anything to edit it on the menus.

If that hadn't been a problem, I'd still be stuffed because there are really no transcoding options to speak of. It accepted the AVI files but apart from "good, better, best" type of settings there's no way I could tell ahead of time what was going to happen to the video and audio. It complained that putting two one hour episodes onto a DVD was going to go over 4.7GB. That shouldn't be the case if the transcode was not going to be adding all kinds of cruft to the video.

I've solved the issue I had with ffmpegX by forcing the output to be 29.97 frames per second (NTSC TV) instead of the 24.xxx (NTSC FILM) that it was defaulting to. I may have been able also force 3:2 pulldown instead to get the same end result.

What ffmpeg leaves me with is multiple DVD folders, each containing a properly composed VIDEO_TS folder. I can dump each onto a DVD or combine them using Toast, with or without a menu. In Toast I can fortunately make a setting telling it not to recompress/encode the video in which case it just needs to multiplex all the sources together and make the menus. Toast's menu themes are limited and not as nice as iDVD, but then again, it works where iDVD doesn't. iDVD doesn't seem to be able to bring in already formatted VIDEO_TS folders nor VOB files (so it means you can't use it for menu-only creation for video).

With the ffempeg and Toast route I can actually put four 1 hour episodes onto a DVD, keeping the same quality as the original XVID recording. "Original" is a misnomer in this context I suppose because the xvids are actually recompressed from MPEG-2 which my capture card puts down by default. I set up transcode operations on the PVR to save space for archived shows.