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I have the same problem. I tried to create DVD folders on hard drive. My project has 3.1 GB and 16 chapters. After running for about 15 minutes PD8 'Completed Normally'. The resulting Video_TS folder contains the following files:

VIDEO_TS.BUP VIDEO_TS.IFO VTS_01_0.BUP VTS_01_0.IFO VTS_01_1.VOB

VTS_01_1.VOB is 1,043,927,040 (1GB). It is the only VOB file created.
So PD8 lost 2 more VOB's.

I can play the partial DVD in PowerDVD directly from the hard drive. It has 5 chapters out of the original 16.

PD8 experienced some problem going to 2nd VOB and decided to Complete Normally!!!.

Here is my configuration:

OS Name Microsoft Windows 7 Home Premium
Version 6.1.7600 Build 7600
Installed Physical Memory (RAM) 3.00 GB
Total Physical Memory 3.00 GB
Available Physical Memory 1.42 GB
Total Virtual Memory 6.00 GB
Available Virtual Memory 3.85 GB

Processor AMD Phenom(tm) 9600 Quad-Core Processor, 2300 Mhz, 4 Core(s), 4 Logical Processor(s)
BIOS Version/Date Phoenix Technologies, LTD 6.00 PG, 11/26/2007
Adapter Description ATI Radeon HD 3600 Series
Adapter RAM 1.00 GB (1,073,741,824 bytes)
Installed Drivers atiumdag.dll,atidxx32.dll,atiumdva.cap
Driver Version 8.681.0.0 (9.12)
PowerDirector Ultra 8.00.2220c

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