I have tested this out - I compiled a collection of example
compositions and burnt them to DVD. They look great on a 26"
widescreen - that's the biggest screen I've viewed it on. You need
to open the composition in quicktime and then export as a .mov file
if you are using iDVD - iDVD will not recognise a .qtz file. iDVD
will encode all the assets in your project when it creates the DVD,
so I assume that it is better to export the .mov file at the best
quality you can.
works fine for me in iDVD 5.0.1, I can drag & drop .qtz in the workspace