This is a great introduction, leaving us all hungry for the second part.
If I could be so bold as to make a couple of comments, which I humbly hope will serve to enrich the excellent stuff above.
Not all encoders are created equal. Whilst the MPEG-2 format is a standard, there are different ways of making decsions about how to predict the next frames based on different motion detection algorithms, which themselves can be based just on luminosity or chrominance (colour) or a combination of both. Sometimes, for the sake of better performance, the length of time it takes to make these decisions is shortened which may sacrifice quality even in constant bitrate encoding situations. The actual settings available are numerous, if you take a look at all the advanced options (this applies especially to MPEG4 encoding, but that's another story for another thread).
The advantage of VBR encoding will depend a little on your encoder too. The better it is at predicting motion and putting this into the first pass cache file, the better the second pass decisions can be made about bitrate allocation. I wholly agree with Marc that two pass is the only way to go. It takes almost twice as long, but the results are well worth it.
Most DVD content I have analysed generally, for one language without subtitles, extra features, etc... will almost fit a 120 minute film on a single layer of the disc. Often the extra data above 4.3 Gig is actually the alternate soundtracks, extra features and subtitles. This shows that content on commercial DVDs is not simply encoded at CBR maximum quality, but rather optimised in the mastering process.
You can do almost everything a professional mastering studio would do for a top quality DVD release, but you may have to resort to separate tools for audio encoding, video compression, and DVD authoring (titles, menus, etc) in order to obtain the best results. The "complete perfect DVD authoring solution" does not necessarily exist as a single package. If you are a stickler for quality then you have a bit of learning to do, but this in itself is a fascinating pursuit. A number of free tools exist, if you have a bit of time to work out how to use them well (it may seem daunting and over complicated to start with). The commercial packages may leave you wanting, especially those that completely hide away advanced options, or which have defaults set to impress you with the speed that they can process your DVD, rather than with the final output quality.