Start with the standard MPEG2 and Dolby DIgital presets from the Disc Burning folder. Depending on what kind of video you use as a source file, Compressor will make the appropriate adjustments to display it properly.
All DVD is SD.. If you give Compressor a 16:9 HD file, it will output 720X480 anamorphic so it displays correctly on a wide screen TV. Frame Controls are on automatically for HD material because the video needs to be resized. So it takes a bit longer to process than SD. If you run into any difficulties in playback, adjust the bitrates downward by about 10%-15% in the Inspector (Quality section of the Encoder).
If you want Compressor to burn the disk, you can enable these stock settings by using the Batch Template.
If you intend to use a DVD authoring program like Toast, DVD Studio, or Encore,then either use the two output files to author – or for Roxio Toast, you could also use a disk image. (And BTW, if you have iDVD, skip Compressor altogether and bring in a Quick Time file.)
Hope that's clear. Good luck.
As I indicated in my first reply, all DVD is SD. If you give Compressor a 1080 or a 720 source file, it will make an mpeg2 file that will play correctly as 16:9.
Here is what the Encoder pane looks like after I create a target with a 1080p source file, which has square pixels.
Here's what the Geometry pane looks like. Note that the pixel aspect ratio is no longer square; it has been re-calculated to display 16:9 from a 720X480 format.
Here's another look at the Encoder, with the Quality tab selected. I have clicked the gear button to make a few changes that will help ensure wide playability – changing the Mode to CBR, I then lowered the bitrate to 6.5 Mbps from the 7.7 Mbps preset.