With iDVD being just a little out of the reach of the consumer target audience of the iMac for the time being, perhaps Apple could offer a new "killer" feature to it's "killer-app" iMovie; the ability to burn VideoCDs with iMovie.
The interface for VideoCD is much simpler than DVDs. A way to add chapter stops to iMovies would be all that is really required, and of course a "Burn" button in the GUI to export the MPEG and burn the CD.
While this may compete somewhat with Toast 5, the other "Pro" features of Toast 5 will still make it a compelling product for those users that require it.
Just my $0.02.
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