If you want maximum control over the process:
Software You will need: Avisynth, HC encoder, VirtualDub,IFOEdit , besweet & GUI and a good authouring software (I use InfraRecorder).
All Freewares.
Basic Process:
* Create a avs file.
* Framserve avs file to HC. Let it encode to mpeg.
* Split audio from original video using Virtual DUB
* Encode audio to AAC using besweet (you can also use mp3)
* Use IFOEdit to multiplex DVD
* BURN [Nero, InfraRecorder anything will do]
You can find a full guide here:
http://www.doom9.org/
Look in the Guides> Format conversion section. Ignore anything you see about DGindex.
This is a good guide too:
http://www.afterdawn.com/guides/arch...avi_to_dvd.cfm
The process is a little time consuming and the learning curve is a little steem so have patience.