iMovie doesn't burn anything. It is strictly a video editor. iDVD only burns projects you create from assets you provide and it authors and burns. It's basically to make home movie dvd's. You don't want to use either of these.

Try these options:

1) Repeat your method of dragging the "VIDEO_TS" folder to the blank dvd. This time, add an empty folder named "AUDIO_TS" in the blank dvd. This should probably work. It's OK to burn it as a "data disc". It will be a UDF (Universal Disk Format) disc, the same as movie dvd's. It should now be recognised as a movie dvd by all your equipment.

2) Buy Roxio ToastTitanium 7. It will allow you to make a movie dvd from your VIDEO_TS folder.

3) Use OS X's built-in DiskUtility (in Applications/Utilities) to create a dvd-r disk image and add the VIDEO_TS and AUDIO_TS folders and burning that image to dvd.

In DiskUtility, click the "New Image" icon in the toolbar. Select Size: 4.7GB (dvd-r/dvd-ram), Encryption: none, Format: read/write disk image. Save image named something like "ANHCLASSIC". This disk image will now show up in the Finder as a volume that you can drag files in to. In the Finder, simply drag your VIDEO_TS and AUDIO_TS folders in there. Once they're copied, go back to DiskUtility. In the left hand pane, highlight the name of the disk image "ANHCLASSIC.dmg" and click the "Burn" icon in the toolbar.

All of these methods should work for you. iMovie and iDVD are not the right tools to accomplish what you want. Good luck!