DV-AVI isn't a requirement, there are several packages that will now work
with directly with WMV, see
http://papajohn.org for details. However,
you'll probably get a better looking DVD using DV-AVI because that's an
uncompressed format.
While I agree that it would be *VERY NICE* if DVD (and VCD) support was
built-in to WMM2, putting all the blame on Microsoft isn't entirely fair
either. The MPEG-2 format may not be as proprietary as WMV, but it is still
restricted in that the payment of royalties is required to use it. I'm not
sure if there is a completely unrestricted, modern (i.e., good compression),
widely available video format - i.e., the video counterpart to OGG or PNG.
Dan