You should only lose a very small amount in the encoding process as long as certain things are taken into consideration.
framerate and frame size are fixed in DVD, but the datarate/bitrate makes a big difference. The higher the bitrate the smoother and clearer the DVD file. Try increasing the bitrate, 6000 or better should give high quality.
Another thing is that not all encoders are equal so you can encode 2 videos using different apps to the same settings and they won't necessarily look the same. I don't know how the ulead plug in compares to others.
You could as you say output to avi and then use an app like TMPGenc to convert to DVD.
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Edius Pro, ADVC300
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