As what "Roadkill" has just posted this is part of the DVD spec.....But this can be overcome with a little bit of cheating...LOL, anything is possible when using multiple menus...
Check out this little sample menu that i did some months ago..
http://doogs.sitesled.com/wmv%20files/16bit%20high%20colour%20menu%20select...
Don't playback the sample at full screen, just adjust the media player window size till the pixelation goes away and the video file plays in good quality.
I used 2 seperate motion menus to create 16 bit high colour activated and selected states.. this was created in Photoshop, Adobe Premiere Pro and then all linked up using Encore.. It worked fine when i burnt the project to DVD RW and tested it on my set top DVD player...I never ever got round to doing a tutorial on it... but who knows i may get one done sometime (if time allows)..
