Sonic DVD-It doesn't like 704x576 PAL MPEG-2s and would transcode them to 720x576 for PAL. Additionally since MPEG-2s edited as MPEG-2 most likely would have a GOP other then IBBPBBPBBPBBPBBPBB, building DVD with DVD-It (transcoding and having standard GOP) and then replacing transcoded MPEG-2 with original using IfoEdit, will not work - audio and video would be out of sync. This makes DVD-It useless for MPEG-2 based production.
TODO:
1. On DV25 to NTSC DVD verify:
a. AC3 5.1 audio
b. That DVD-It will not transcode compliant MPEG-2 with "Convert all compliant video" option in Project settings
2. Play with Mpeg2Schnitt to cut Katherine MPEG-2 videos. here they basically say that Mpeg2Schnitt is the best to cut MPEG-2.