When your DV sequence is complete, the highest quality way to get to MPEG-2 and AC3 files for your DVD delivery is using Export Using Compressor from within Final Cut Pro.
File > Export > Using Compressor
However, this method is slow and ties up Final Cut Pro while it works. Depending on your deadlines and facilities, not being able to use FCP while the compression is going on can be a bummer. You also need a working knowledge of Compressor.
A second way to go would be to export a movie that you will then bring into Compressor or DVDSP:
File > Export > Quicktime Movie
Setting : Current Settings
and Check next to Make Movie Self-Contained.
This will give you a stand alone DV movie of your final product that you can bring into Compressor or DVDSP.
If you don’t check Make Movie Self-Contained you will get a reference movie. This movie will be quite small. It works by refering to the original media. If the any of the original media is moved or deleted, this reference movie will not work. Creating a reference movie is a good choice if you lack disk space, but will can get dicey if you move projects and media between computers and drives. Use with caution.
The down side of this method is it introduces one additional compression cycle.
I suggest you find a 15 second bit of your sequence that has many elements and test different methodologies to see what you like. The additional DV compression of an export from FCP is unlikely to matter as much as really nailing the mpeg-2 settings in Compressor. Test all the way out to burning a DVD and playing it on your TV. Label the burned discs and compare and contrast.
Mpeg-2 settings, to borrow a phrase from David Bogie, is part science, part dark art. Experimentation on a little bit of video, as well as reading the manuals and anything you can find online, will help a tremendous amount.
If your are going to iDVD, you don’t have control over these mpeg-2 settings. Just export your DV movie from FCP, bring the result into iDVD and hope for the best.
Good luck.
Tom Meegan