I've burnt a DVD, with a .tiff I've created in Illustrator for the background and the text created within DVD Studio Pro. The menu looks great when I simulate, but when I burn, the color of the background fades a little, the buttons and text become slightly pixelated and the overall quality goes down. I'm doing a 2 pass VBR, bit rate of 7 for the MPEG-2 SD preferences. Any suggestions on how to improve the quality of a basic menu?
Create the menu background as a mpeg2 compliant stream before bringing into Studio Pro (intead of using a tiff or PSD). Studio Pro will compress any image file to mpeg2. If you create the file before hand in say After Effects, when you output to mpeg2 that will be your end result on DVD.
Personally I use Sonic's SD-2000 to encode my menu backgrounds to mpeg2(Still or Motion).