Thanks both for your replies. The DVD is for my friend's mum who doesn't have a computer. The original was from a VHS and I don't really want to compress more than I have to as it's not great quality anyway!
I did a lot of fiddling last night and it appears if I choose 'widescreen format' - which the menu template seems set for - this uses up a heck of a lot of space. Reduced screen allows it to fit on the disc, but doesn't look as good. I'm also concerned I've compromised the quality already.
If I want to put it across two DVDs is there an easy way of achieving this or do I have to just split the footage? There's no "two disc" setting?