You could try to use Compressor to convert the file to 720p H.264. That should go into DVD Studio Pro.
As a matter of fact I tried such a conversion myself, though I wasn’t completely satisfied with the output. It wasn’t that bad, but I was hoping for more. The colors were not right, and with jerky movements in some scenes. Though I still believe, that you could achieve a better results by tuning some of the settings in Compressor, which I haven’t had the time to try yet.
So I someone have a recipe for Compressor conversion from 1080i to 720p I would love to hear.