After seeing hack5 for the first time and reading this post, I had to register. If you're still looking for DVD authoring software, I highly recommend Adobe Encore. I haven't come across anything better, having authored many dvds. The commercial TMPGEnc software bundles and many others that are similar make your dvds somewhat incompatible and ugly. If encore is too expensive or you have found something already to edit menus, etc, I would recommend using the TMPGEnc Encoder for transcoding your avi's to mpeg2. Just make sure you select "center, keep aspect ratio", i assume your dv footage is 720x480. It's free and does 2 pass vbr, noise reduction, etc.
Also as a footnote, if your vegas video editor, which i've never used, supports 5.1, do it! for the moments you guys walk behind the camera or paper airplanes fly by.
