Your Scratch Disc ( the disc where captures & media are stored) should ideally be on a disc other than the System drive eg. external firewire.
This frees up your system drive for overall better performance.
Video files are large and having 16 gig free is probaly the cause of the warning and export issue.
DV is about 13 gig and hour and HD uo 40-50.
FCE can use a Reference file export that uses way less space than a Self-Contained type.
Reference exports work fine to iDVD as long as yu do everything on the same Mac.
Scratch Disc settings are changed anytime through FCE->System Preferences.
In addition to Al's response, with only 16GB left on your internal hard drive you are effectively out of disk space. You need to move stuff off that drive and/or delete what you no longer need. If you are doing video it is wise to keep at least 50% free space especially if the drive capacity is 500GB or less.
If you are doing HD video, here are some numbers to consider:
- 1 hour source media (video clips) = ~45GB
- 1 hour of render files of your 1 hour movie = ~45GB
- 1 hour exported QT movie = ~45GB
- 1 hour iDVD project of your completed QT movie = 2 to 4 GB
So your 1 hour project could easily consume 140GB of disk space.