I suppose I'm missing something, but I'm not at all clear why you would want to make an SVCD if you can make a DVD.
However, if you want to have the MPEG file on your hard drive and use Nero to Burn onto DVD, why not use the make MPEG facility. It has an SVCD option.
I have no idea though about chapters. I guess you'd have to try it and see what happens.
Win XP, Athlon 1.8, G force 3 T, 1 60gig drive + 1 250 gig, Pinnacle Studio 9 plus mostly, Premiere 6, and Vegas 5 sometimes, Soundforge, Cool Edit.