You can convert mpeg to mpeg2, but as with any re-encoding you'll lose quality.
As for playing on you dvd player you can encode the video and burn to a cd, the biggest problem is that you have a 20 min. limit on video length.
I'd suggest experimenting with different resolutions and mpeg codecs before you burn you videos just so you can see what you think is the best.
Good luck,
Nick
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