Re: exporting from FCP for the big screen

Re-compressing is a sure way to lose quality.

DVDs use MPEG2 coding so using H264 as an intermediate step is likely to be pretty disastrous IMO.

The least bad way to go about what you're trying to do would be to rip the DVD into ProRes, do the subtitling, then encode back to MPEG2 assets to burn a new DVD.

Also, keep the same pixel size, pixel aspect ratio and interlace status (unless you really want to change them).

If the quality is still too poor, you'll have to go back to the sources, which will be a horribly slow and painstaking process. I don't know of any shortcuts to doing that without the original timeline. In theory you should be able to separate out the audio from the DVD without re-encoding it and just do the vision (although I haven't actually done that myself).