On the lower end of the scale, I encode my material from VHS, Betamax, or laserdisc (using the S-Video connections when possible) with my DVD recorder while choosing the closest appropriate recording bitrate for the task. The finalized DVD is then imported to my computer where I use The GIMP to create menu and background graphics and TMPGEnc DVD Author to put it all together.

If I had more computing power and larger hard drives, I'd probably venture into the computer encoding route with higher end authoring software, but the results so far (mostly using VHS and Betamax masters) have been pretty good.