[carlos crooks] “I’ve tried making a button in PS and importing it as a menu in Encore, but the text will show up immediately which makes (two) play buttons on the screen!”
This is the only correct approach, but you don’t exactly have the right understanding yet.
It’s not possible to make a video file into a menu – you must have a PSD file with the correct layer prefixes to have a menu in Encore. So what you do is create a PSD that has ONLY the button layer sets with highlights within it, and then add the video to the menu background.
You then set the Loop Point property to the timecode where you want the buttons to be active.
That’s pretty much it.