Export directly to Compressor will give you the best results. This option will take over FCP until the export is complete because it goes through your timeline frame by frame. File > Export > Using Compressor
If you want to still work on FCP while exporting, try exporting as a Quicktime reference file: File > Export > Quicktime Movie… and make sure the option “Make Movie Self-Contained” is OFF. You can then drop that exported file into Compressor and, while it’s chugging, you can still work in FCP.
As the for the “best settings” you asked about, that’s done in Compressor. The “best” depends on how long your video is. The longer the video (+90 minutes) the lower the quality will be to fit it on a single DVD. (as DVD’s max out at 4.7GB) Any timeline under 90 minutes, just use Compressor’s preset – DVD: Best Quality 90 minutes
– Aaron