My understanding was that it was mpeg2 on DVDs, shouldn't this be easy?
No it is not easy. iDVD can not eat natively it nor can Roxio Toast™ or DVD-Studio Pro.
So it has to be converted one way or another.
I think one can make a folder and that Toast™ can use it from here to make a DVD copy.
But this is no easy and straight forward thing to do.
I would download MPEG Streamclip from the net (free) and if You've bought the mpeg2 component then this should let You convert to streamingDV .dv or H264 and this iDVD can use.
If You just put a DVD into Your Mac it will end up on DeskTop and You can store Your Mpeg2 movies on it - BUT THIS RESULTS IN A - Data-DVD and are not Playable on any DVD-Player and are not a - Video-DVD as is what iDVD and Toast™ and DVD-Studio produces.
Yours Bengt W