I could not get this feature to work in Encore, so I used DVD Studio Pro instead.
In DVDSP, I put all of my assets on one timeline (videos and stills) and put chapter points where each asset started. So when I hit the skip button on the remote I went to the next asset.
Encore forces me to make timelines for each asset. Thus not allowing me to create chapter points to forward to the next asset when I hit the skip button on the menu. Is there a way for me to do this in Encore v1.1?
Encore doesn't allow you to put multiple assets in the same timeline, unless they are all stills.
Remember that Encore is still a 1.x version, so it's got a long ways to catch up with other programs. But I still think it's pretty good for what it does. You can submit a feature request to Adobe if there's something you'd like to see in future versions: http://www.adobe.com/support/feature.html
You can get around the problem of having to deal with multiple timelines by putting a chapter point at about 1 sec. before the end of each timeline. When the user presses the "next chapter" button, it will jump to that, and after a short delay the next timeline will start. Not the most elegant solution, but it works.