The minimum that the Mainconcept encoder will allow is 192,000 (either standalone or in Sony Vegas - yes, they are the same, but the standalone offers far more options.)
I used an I-frame distance of 6 (for better chapter point accuracy), and went ahead and closed the GOPs, just to see what would happen (file size, compatibility, etc.) and I've had no problems. I'm using DVDLab Pro, because I wanted the second commentary soundtrack (regular DVDLab only allows for one soundtrack.) I recently installed DVD Architect 2, which I used before DVDLab, but I've not tried my SW MPEG with it yet, so I don't know if they'll work or not. I should just try a quick compile (1 basic menu) just to see, but otherwise, I've had no problems. Keep in mind, also, that my MPEG is anamorphic, so a letterbox version should work as well.