DVD authoring with variable-encoded MPEG-2, anyone?!?

[pnag]

Hi folks,
I'm trying to make a nice dvd from my old laserdisc collection, and yes, seriously, it is just for my own use as no one else would want the movie! I've captured it, it looks great, it's in MPEG-2. There are a couple of problems, though. I'm using DVDIt Pro, and when I change the audio to Dolby Digital (REALLY saves space!) it skips, drops out and sounds really scratchy. Also, I'd like to encode a three hour movie on a single DVD-R. I know the quality will drop off like there's no tomorrow, but does anyone know of a DVD authoring tool that will let me do nice menus and will allow the movie to be variably-encoded? It's a tall order, I know, but you guys REALLY know your stuff... Any help would be much appreciated!

[leebo]

You really should check out the Sonic forums.

I believe DVDit PE requires wav audio for conversion the AC3