It sounds like you are trying to convert to MPG2 directly from the video camera. You need a powerful computer to do this and it looks like that your PC can't handle it...
SO...
Use a program like WinDV (
http://windv.mourek.cz/ ) to transfer the video from your miniDV camera to your computer and then feed the .AVI file (resulting file will be 13 gigabytes per hour) into your preferred MPG2 encoding program (in your case dvdSanta)
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