what formats I can import into iDVD 6 to create a DVD
The iDVD6 Help menu is your friend:
(the latter part of your question regarding mpeg 2 is highlighted / answered below also).
Video and image formats that work with iDVD
You can use these movie and graphic formats in iDVD:
Most video or image files supported by QuickTime (see the list of unsupported QuickTime formats below).
High definition video (HDV).
16:9 widescreen formats.
AAC, MP3, and AIFF audio files.
MPEG-4 and iSight video imported as an iMovie HD movie.
High definition video that you add to your project is converted to work with the format of your project. iDVD supports using 16:9 widescreen video, so that when your DVD plays on a DVD player that supports widescreen format, the footage appears in its original aspect ratio.
The following video and image formats are not supported in iDVD:
Copyrighted or protected videos.
Movies saved in thousands of colors using the "none" compression setting in iMovie.
48-bit color images (16 bits per color). To use source files in one of these formats in iDVD, save them in a supported format.
Aurora uncompressed files. For best results, export Aurora clips as DV-format video before importing them into iDVD.
QuickTime VR, MPEG-1 or MPEG-2, Flash, streaming or encrypted movies, or QuickTime spanned movies.
You can't add MPEG-1 or MPEG-2 files to an iDVD project because they don't contain standard video tracks.
QuickTime Fast Start movies. (Fast Start movies are intended for Internet playback.) When saving a QuickTime movie for use with iDVD, click the Options button in the QuickTime Export dialog and make sure that the "Prepare for Internet Streaming" checkbox is not selected.
Note: You can add any file to the DVD-ROM portion of your DVD so viewers can copy the file onto another computer.
Hope this info is helpful.
SDMacuser