I also don't quite get why everyone uses raster-based programs to do everything. Personally, I prefer CorelDRAW! (don't laugh) to Illustrator, but both are primarily vector-based and therefore very good at lossless scaling of all the elements that aren't photos. Like text, for example, of which there is typically quite a bit on a DVD cover.
Let me put it this way: I can all but guarantee the people who create real DVD covers for commercial releases don't do all their work in Photoshop. More than likely, they use Illustrator or InDesign or some other vector app. Why don't interested amateurs do the same, I wonder?
By the way, as a bit of an aside, I also don't understand why so many people use JPG for compressing covers that have a lot of small text. That's so wrong! JPG is absolutely sh... crappy at compressing solid colours with sharp edges. For a modest increase in size (on average -- might be larger, but also could be smaller), PNG is completely lossless. There are different file formats for a reason. Please choose amongst them wisely!