I solved my transcoding error by saving my Premiere project to a larger hard drive. When I burn a DVD from Premiere, Premiere will create a folder called Encoded Files, and in that it will make a folder with the name of the project. In that project folder Premiere makes another folder with the name of the time line. Inside that it makes a m2v and wav file that it uses to make the DVD. You not only need space, but it must be defragmented space.
CAUTION: Premiere Pro 2.0 may not recreate these m2v/wav files if you make small changes and burn a DVD again from Premiere. It will use the old m2v/wav files and skip your changes. Change the bit rate by some small fraction to force Premiere to recreate the files.