If your DV camera has an analogue in port it's a snap (well, not quite): Plug the camcorder to your vcr and record your show onto a DV tape. Plug the camcorder to to the iMac via the firewire. Import the show into iMovie. Using Toast 5 Titanium export from iMovie as VCD. Burn it to disc with Toast as VCD.
If you can't record analogue signals with your camcorder you'll need something like the Formac Studio (www.formac.com) to import directly from VHS into iMovie. You'll still need Toast 5 for the encoding and burning.
(You could use another encoder such as Astarte M.Pack, which is no longer available, or Media Cleaner 5 (expensive!!!)to make the mpeg stream, if you have one of those. Also Toast 4 Deluxe burns VCDs, but it won't encode. All in all Toast 5 is the easiest route.)
Good luck!