Patrick, I’ve shot school musicals as long as 2.5 hr., burned them to a single layer DVD and found the quality acceptable.
To my benefit, I was shooting with a good 3 chip camera and the stage was well lit.
Starting with good quality footage definitely makes my job much easier 🙂
I ran your time through the bitrate calculator I use and here are the numbers I got.
Max: 8,688,000
Avg: 4,960,000
Min: 2,976,000
This assumes an AC-3 rate of 192.
Render in BEST mode and do it as 2-pass render for maximum quality.
I make a few changes to the default settings for that bitrate calculator and they are as follows.
Click the Settings button (lower left corner), set 1 kilobit=1000 bits, set Audio encoding type and Bitrate to 192 Kb/s – Dolby 1.0 (the AC-3 default in Vegas) and the Safety Margin to 5% (default is 1% and I like to have more margin than that).
Good luck!!