Well, after much time wpent with the poorly written tutorial we were able to get a DVD burned. Instead of creating an iDVD project from iMovie I launched iDVD and then brought in the movie file created by iMovie.
This program is definately not as easy to use as the previous version.
Hard disk space is not an issue, we have a new G5 1.8 with 160 gigs, and very little put on it yet.