Yes, it burns discs, but burning files to a DVD disc and actually authoring a DVD are two different things.
A DVD movie disc has a lot of extra files on it that describe the menu, chapters, and other features of the video, which is wrapped in .VOB files. The media has to be in a particular format to author, either MPEG2/MP2, or MPEG2 wrapped MPEG1 with MP2 audio (aka VCD on DVD.)
MPEG2 is really poor at compressing files, but it's possible to get that much video on a disc, especially if you use a dual-layer disc. Otherwise, the quality is going to suffer because your bitrate is going to be really low.
I used a program called SpuceUp! to author discs, it was a simple authoring program that could do static menus and simple chapter breaks. Apple bought Spruce and killed the program. I still have it with the keygens, although it's getting pretty old at this point. Should still work fine for simple discs, however.
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