If you are using iMovie for the initial capture, then just do Share>>iDVD, once open, set the iDVD preference to 'Best Quality'. This will let iDVD make the content fit on the DVD with the best quality possible.
As for compressing video, Select Share>>Quicktime, then in the drop down, do 'Expert Settings', then before saving, do 'Options' and mess with the video and audio bitrates, Frames per second, etc. and look at the bottom of that window to see how big the file will be. I get decent quality at about 1024 Kb/s on video and then just use standard 44.1 khz and 128 or 160 kb/s on audio. Then save as .mp4 with h.264 encoding.
Brian