You will need both TMPGEnc programs unless your movie is already in DVD compatible MPG format.
The best program i have found for shrinking large dvd's to a dvd-r format is DVD Shrink. I'm presently using V3 Beta 5- very stable and prety fast
I use -R disks only, i buy cheap bulk spindles of them and don't have any problems with coasters etc. I think i am paying around £25 for 50 dvd-r disks (when i can get them on offer

) or around £60 for a hundred at other times- shop around and see what you can find, some places do great deals!
I'm using the NEC ND 1300-A drive with region free bios (rpc-1 patched)- great drive and i believe i first found out about it on this very site :P