H.264 is a delivery format / compression scheme. Great for streaming to AppleTV, iPod, etc.
However, I'm still shooting and working with .DV (mainly via FireWire on a Sony 3 Chip TRV900). And David is correct. Eventually this is all compressed into Mpeg 2. It's tried and tested / old technology but it works great for what I do.
Unfortunately my G4 Power Mac/s (even with all its upgrades) isn't really beefy enough to address H.264 so I will let others who actually use this latest format on this forum help you from here forward.
And just so we're all on on the same page, here's what iDvd's Help menu says about which formats work best with iDvd'08:
Video and image formats that work with iDVD
You can use these movie and graphic formats in iDVD:
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Most video or image files supported by QuickTime (see the list of unsupported QuickTime formats below)
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16:9 widescreen formats
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AAC, MP3, and AIFF audio files
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Any format from iMovie: DV, high-definition video (HDV), MPEG-2 SD, MPEG-2 SD, MPEG-4 SD, MPEG-4 HD, and AVCHD
High definition video is converted to work with the format of your project. iDVD supports using 16:9 widescreen video; therefore, when your DVD plays on a DVD player that supports widescreen format, the footage appears in its original aspect ratio.
The following video and image formats are not supported in iDVD:
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Copyrighted or protected videos.
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Movies saved in thousands of colors using the “none” compression setting in iMovie.
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48-bit color images (16 bits per color). To use source files in one of these formats in iDVD, save them in a supported format.
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Aurora uncompressed files. For best results, export Aurora clips as DV-format video before importing them into iDVD.
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QuickTime VR, MPEG-1 or MPEG-2, Flash, streaming or encrypted movies, or QuickTime spanned movies. You can’t add MPEG-1 or MPEG-2 files to an iDVD project because they don’t contain standard video tracks.
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QuickTime Fast Start movies. (Fast Start movies are intended for Internet playback.) When saving a QuickTime movie for use with iDVD, click the Options button in the QuickTime Export dialog and make sure that the “Prepare for Internet Streaming” checkbox is not selected.
NOTE: You can add any type of file to the DVD-ROM portion of your DVD so that viewers can copy the file to a computer. Viewers can access these files only when viewing the DVD in a computer, not a DVD player connected to a TV.