When you say “seek, rewind, or fast forward”, I’m guessing you mean next and previous chapters on the DVD. Which means you must check the box that says something like “save project markers in rendered file” when you render to mpeg-2 in VP8.
Only a guess here, but it might be the problem.
Jeff
Windows 7 64-bit, ASUS P6X58D, i7 960 3.20GHz, 24.0GB DDR3, 12TB connected storage