Yes,
It works with MyDVD authoring.
- I selected mpeg-audio in TMPeng (de-selected PCM-audio).
- selected VBR (two-pass)
- Elemental stream
- results were .m2v and .mp2
- DVD plays o.k. (NTSC)

When I select the .m2v file in MyDVD to burn , it brings in the m2v and displays a message "Transcoding mp2 audio". The DVD burns with no problem (as much as 130 minutes) on a 4.7gb dvd. Don't know if it is transcoding back to pcm audio in the background but if so how can it still fit over 2hrs on one dvd.
Not complaining though

Thanks for the help!