Many (most?) DVD authoring apps include mpg2 encoding for menus, but I think most mid-level & up also are designed around the idea that your content will be encoded elsewhere, using the more specialized encoder of your choice; Hollywood for example can encode scene by scene & still get just one mpg2 file.

DVDA is no exception, and you can import most all ac3 audio & DVD spec mpg2 video.; Vegas includes templates for DVDA to make importing the video quicker -- DVDA historically prefers a slightly different mpg2 format you can approximate by muxing m2v without an audio stream, & while v.4 will import m2v, there are issues.

At any rate, render in Vegas using the templates -- adjusting as nec -- and you should have no problem or have any re-render. As came up in another thread, don't add anything to your mpg2 menu -- just set the button hi-lites and areas -- and DVDA shouldn't have to re-render that either. Click optimize under the file menu and you can see just what will be rendered, & what will be OK as is. Otherwise it will take a few minutes to copy your media content to the DVD folder -- using another hdd on another channel helps -- and DVDA does need to render the menu hi-lite & optionally sub overlays.