I'm at a loss to understand why you're running up against so many problems!!! Seems you've been very unlucky!
Anyway, the template I gave you shouldn't need anything changed (you'll notice all the options under GOP are locked. Changing these settings would mean deviating from the standard and isn't reccomended).
If you upgrade to v1.3 of DVD workshop, you can input elemetary streams no problem (I tried using a trial version and it worked perfectly). So all you have to do is run your AVI file through TMPGenc, output elementary streams then stick those in Ulead DVD workshop to provide a perfectly compatible NTSC DVD!
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GOP 
Linear Mode
