iDVD takes 27 hours to process/encode/burn!

I used iDVD to burn a disk containing a 780MB movie, and 30 RGB photos totaling about 16.5MB in all for the photos (some as low as 125KB to some as high as 2.9MB). I always get the error message saying 'Error while encoding' and it doesn't get to burn stage. I don't get any problem if its just a movie.

I was successful one time burning my project. The movie was fine but in the slide show, the photos flickered, some discolored, some started in B/W and color came on 2 seconds later, and yet some were without color..
My slide show is activated with 'Fade to black' transition effect for every photo.
My Macintosh HD has at least 2.5TB available.

Does this mean that each photo's transition effects is 'too much' stress on the iMac's CPU and therefore causing the iDVD not to burn properly? I am now trying to burn a DVD with the movie and slideshow but with no transition effects and with a reduced number of photos.

Using iDVD 7.1.2 with a iMac MacOS 10.9.4, 2.9GHz Intel Core i5, 32 GB 1600 MHz DDR3

Your iMac has plenty of power to process your movie and photos so I don't think that's the problem. I don't use iDVD so I can't really comment on whether you're doing it correctly or not. However, you might want to try the free open source "Burn" application instead to see if the results are any better. You can download it from here. Make sure you download the 64 bit version.