I think he's trying to downconvert the 720p video to 480p DVD-quality mpeg.

If that's the case, you might want to check videohelp.com for suggestions on which mpeg encoder to use. The audio tracks in the 720p version should work as DVD audio tracks without any conversion. The audio and video tracks will need to be demuxed, which you can do with MKVExtract. From there you can figure out how large you want the mpeg2 DVD video file to be and set the mpeg encoder accordingly. It's been a while since I did any DVD mastering so I don't know what the current leading encoders and authoring sofware would be.

Another option is to see if your DVD player will play Divx or Xvid files. If it will you can use virtualdubmod with an h264/mpeg4 plugin to convert the video to one of those formats and play it that way.