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iDVD will re-encode to MPEG-2 regardless of the format, and only reads what quicktime reads. If you don't have the MPEG-2 component, you will need to convert your MPEG-2 to mov first with one of mediapipe, MacMPEG2Decoder, MacMPEG2Converter, MPEG2DecX, or ffmpeg (followed by Divx Doctor)