I might well be wrong here, but I think you can do it in Encore 1.0 aswell. using the "override" function.
I agree with the studio 9 comment, it should certainly be possible to link a few menus together in any DVD authoring tool.
I suggest using the burning software that came with your PC, you will probably have Sonic MyDVD or a Nero package that will handle this easily. I know MyDVD does it simply, but you can't do the one chapter at a time thing with it though.
unless your movie is short enough to fit on to a DVD twice, then you could create one clip with the whole thing and label it PLAY ALL, and then create individual clips corresponding to the chapters you want, and have a menu linking to each one in turn. It's a messy work-around but it will work. (probably)
Panasonic SD9, Panasonic NVGS-75, Canon MV600i