Thanks to DiiZzY, I know know the max bit rate for MPEG1 and MPEG2
http://club.cdfreaks.com/showthread.php?t=95272

It got me a thinking...
I'm currently capturing analog VHS, creating MPEG1 video and burning a DVD.
Would upgrading my software to write MPEG2 and using a higher bit rate mean that the quality is better, or does it just mean that the compression is better and I'll be able to fit more on the DVD???

Also, would there be any disadvantages to using MPEG2 over MPEG1? Would it mean only recent DVD players could play them?

Slightly embarrassed at not knowing things which are probably quite fundamental, but hey you gotta start somewhere!

all dvd players are required to be able to play those mpeg1 and mpeg2 video streams, so compatibility in that respect isn't an issue.

with mpeg2, you can capture in higher resolutions as well as use higher bitrates for higher quality, although you might not see a difference if the source is VHS. mpeg1 vs. mpeg2 doesn't really have anything to do with compression; you can think of mpeg2 as mpeg1 with support for higher resolutions and higher/variable bitrates.

if your primary concern is quality, you might want to consider capturing in raw AVI and then using an encoder like Cinema Craft Encoder to reencode to mpeg2.