If it's already an mpeg, why re-encode to another mpeg?
Most players will accept non-standard aspect/framerate mpegs, and play them successfully. All you need to do is author it, then shrink it.
VSO will re-encode it, but with no control over bitrate, the mpeg won't shrink enough to make any difference. It's still going to be too large for 1 dvdr.
How long is this movie? What are it's current audio and video bitrates?