It really depends on what software are you using. Years ago I used Mediachance DVDLab Pro, that one was capable of doing it.
The basic principles :
- you need one “main movie”
- every alternate / extended scene should be encoded as a separate movie
- the main movie must have I frames put into exactly the frames which you will use as “branching points”, so you must use a mpeg2 encoder which allows you to do this. If you don’t put the “branching points” on I-frames, the branching will not be 100% seamless
- The main movie has to be split into chapters correctly.
- the last step will have to be the correct playlists in your DVD authoring software, so each movie version will have its own playlist.