Under 10 GB free on your boot drive is critical. You won't be able to burn the DVD once you create it, because that just isn't enough for the computer to encode, render, process, etc. the file into the format that goes on the DVD.
for format it says 'MS-DOS file system'
Wait!!!
Your external drive simply will not work correctly with the large files created in iMovie, and possibly iDVD. It may
seem to work okay when you save photos to it. But please do not proceed until you have moved everything off that drive (temporarily) and used Disk Utility to reformat it. SDMacUser has given you the same advice as well.
Have you done that yet? If you need step-by-step instructions post back and one of us can give them to you.
You said you moved your photos to the external drive already. Are there any photos in your iPhoto Library
folder, or have you not been able to import any because iPhoto closes itself?
There was recently a bug that caused iPhoto to crash like that. The fix is to make sure that your relevant applications are up to date. Specifically, a version of QuickTime and its iPhoto counterpart were the cause of the crashing bug. You should be running:
OS 10.4.9
QuickTime 7.1.6
iPhoto 6.0.6
And also check:
iMovie HD 6.0.3
iDVD 6.0.3
To find the version you have, go to the Finder and set it to column view. Click on your Applications folder. Locate each application and select it (click once). In the next column it will show you the version number. For your OS version, click on the blue Apple menu, then choose "About this Mac". The version will be in the pop-up box.
When you have updated those applications, perhaps iPhoto will open and allow you to import your pictures. If not, I will help you start with a fresh library. But you really need to reformat your external drive and move your iPhoto library folder to that drive to keep it from filling your boot drive.
Once you have done the crucial maintenance tasks, we can help you with your slideshow. iPhoto and iDVD work together to make it really easy.