Rather than use the Share ➙ iDVD menu option use the Share ➙ Media Browser option. This will give you a much better movie for importing into iDVD via the Media Browser in iDVD. The first option only uses every other line in the movie which really degrades the results.
Or better yet get a copy of iMovie 6 HD and use it. It produces the best output for iDVD of any iMovie versions.
The save to Media Browser puts the movies in a subfolder, iMovie Events in the Movies folder. You probably could move that sub folder to the EHD and put an alias or symbolic link to the folder in its place. That way you can store your movies on the EHD.
OT