Using Pre-Encoded Sources
Many other available tools, including software and hardware encoders, produce MPEG
streams. You can use any MPEG encoder you prefer, as long as it creates DVD-compliant
elementary streams. This means that the audio and video information is contained in
separate files (the streams).
DVD Studio Pro cannot use MPEG multiplexed System, Program, or Transport
streams for DVD projects.
About MPEG Video
for more information on DVD-compliant requirements.