You can create a chapter from an MPEG2 file (without conversion).
MPEG file requirements:
MPEG 2 for DVD and SuperVideoCD
MPEG 1 for VideoCD
File resolution:
vcd PAL 352x288
vcd NTSC 352x240
svcd PAL 480x576
svcd NTSC 480x480
DVD PAL 720x576
DVD NTSC 720x480
File FPS:
NTSC 29.97
PAL 25
1. Under "Build chapter from:" check the "MPEG file" box.
2. Click the "Select MPEG File" button.
Conversion does not need to be performed, so the DVD creation process will go much faster.