Thought I’d bump this in case anyone wants to continue the discussion.
If the end result is a DVD, coming out of Blender to a lossless compression doesn’t really help anything, does it? Before it goes to disc the video is going to be compressed to an mpeg-2 file regardless. The only question is whether you let the burning software do it, or you set it up yourself in Blender.
The only real advantage I can see to not writing mpeg-2 directly from Blender is if you intend to use a different compressor. Tmpgenc supposedly does a better job than ffmpeg and, of course there are commercial encoders, but it seems like you should be able to get very acceptable quality directly from Blender. 2.46 gives you pretty complete control over ffmpeg, so you could add b-frames, up the min. data rate, change the motion estimation scheme, etc.
I’d like to know what others are doing and why, since I’m working on video projects slated for DVD distribution.