[ffooky]

Righto,
What you have are VCD standard MPEG files. Less than stellar quality obviously but the good news is you don't have to re-encode the video track in order to burn them to DVD. The audio will need to be upsampled to 48 kHz...in my experience this can lead to sync issues, at least using Toast but you may well get better results with ffmpegX.

Unfortunately, no one step method of passing the video through/upsampling the audio with ffmpegX would work other than the svcdvd option from the Tools tab, for which you need to register ($15). Small beer for supporting a great developer but free would be nicer.

You can mimic the process by demuxing your MPG files (Tools tab->demux) and then dropping the resultant MP2 file on the main window and selecting Audio file to MP2 in the target format.

Back at the Tools tab, select mux, navigate to the M1V file created earlier when you demuxed as the video and your upsampled MP2 for the audio 1 (ignore audio 2). Select DVD as your multiplexing option and let her rip.

It would probably be a good idea to test whether there are any nasty synhing issues on a smaller MPEG1 file first.

HTH