Well, I still maintain that iDVD will do excellent quality DVDs - I've used it for years with excellent results when the physical disk is displayed on HDTVs, projectors, etc. On the suggestion to use High Quality, my recollection is that High Quality equals one-pass constant bit rate. It can give excellent results, but if you have a lot of motion you might see some artifacting. And, it used to be limited to only 60 minutes of video on the disc - I assume that's still the case. Professional Quality encoding will almost always give better quality, and will fit more video on the disc.
I took a little time today to experiment with using Compressor instead of iDVD. I immediately ran into the fact that there are practically no options for making a professional-looking contents screen for your disc. I just don't know if I could live without all the polished iDVD themes available, unless I was just making a quick-and-dirty preview disc - but I never have a need to do that. I always make use of the "fancier DVD menu options."
In addition, I often create DVDs that are not just one video, but rather several shorter videos on one disc. I can't see a way to do that when authoring in Compressor. I even checked out a few web tutorials and the lynda.com training for Compressor. If it's possible to have multiple videos (not multiple chapters) on a disc created in Compressor, please tell me how.
So why not compress in Compressor and use those files in iDVD? As Tom said earlier, iDVD won't recognize them. I think they're meant to be used in DVD Studio Pro or some other higher end DVD authoring tool.
It may be possible that if you are creating a disc with only one video, can live with a contents screen that is bare bones (or nonexistent), and tweak the settings in Compressor to two-pass vbr and maximum data rate, you might get a DVD that is slightly better quality than iDVD can produce. However, I'm not yet convinced, so in the interest of open-mindedness I will be testing this when I get time this coming week. And, for my particular needs it's going to have to be noticeably better to offset the authoring and workflow restrictions it would impose.