Dear, you just don't need to convert it to MPEG2. DVD video (VOB) is a subset of MPEG2. You need a proper software that not only convert MPEG4 to MPEG2 (VOB) but also create directory structure (AUDIO_TS and VIDEO_TS) and IFO files and of course menu files. These all files will be exported to ISO image. Then you can use Nero or ImgBurn (freeware) to burn that ISO image to DVD-R.
A typical DVD file list (just for example, I am copying from my collection at HTPC):
[Max Payne DVD]
* AUDIO_TS is an empty folder. It is use for DVD Audio.
* VIDEO_TS is a folder where DVD Video files are store.
* VIDEO_TS.IFO has information about DVD.
* VIDEO_TS.VOB has DVD Menu (sometime FBI warning etc.)
* VIDEO_TS.BUP is backup of VIDEO_TS.IFO
* VTS_01_0.IFO has information about main movie.
* VTS_01_1.VOB original movie video. Size must not exceed 1GB otherwise standalone players will not play it.
* VTS_01_2.VOB second part of original movie.
* VTS_01_0.BUP is backup of VTS_01_0.IFO.
You need two steps:
* STEP 1
Use a good conversion software that will not only convert MPEG4 (AVI) to MPEG2 (DVD Video VOB) but also create basic menu, IFO files and folder structure and export all these files to ISO image.
* STEP 2
Use Nero or ImgBurn to burn that ISO image to DVD-R.
That's very simple. I mostly do these two steps. But once in a while I run into trouble and have to manually create menus, IFOs etc. and that is really a pain in the neck.
By the way, after you have created a ISO, you can mount that ISO and try to play it in your computer before burning it (just for precaution).
Whatever method you do; Do tell us with your success and how you do it so that all other Wiredian can learn from your experience