Burn Highest Quality DVD from iMovie '11 where source is from DV tapes?

Hello everyone -- I'm hoping to find an answer that isn't too wildly technical and doesn't discuss the HD aspect of things.
I recently used the Share --> iDVD method and the results were pretty bad. It looked unsaturated, bland, pale, and blah. But any clips with increased contrast or saturation (changed within the editing process) looked jaggy and pixelly. In one clip, I lowered the exposure and brightness of rippling waves in water so they were very dark. It looked great within iMovie, looked like pixellated psychedelic nausea-inducing goofiness after I exported it, and truly appalling on the DVD.
The source video isn't brilliant, but when I make a Quicktime movie of it (using Share --> Export Using Quicktime, i think default settings) it looks OK. (except for those waves.)
I'm using an iMac running 10.8.1, Snow Leopard, and iMovie '11. iDVD is 7.1.2
I also have Roxio Toast 10 Titanium.
Also, I used whatever the default settings are to capture the source video from a now-old Canon DV camera. Was that a mistake -- are there special settings I should dig up?
Thanks so much for any help you can offer.
  Model Name:          iMac
  Model Identifier:          iMac9,1
  Processor Name:          Intel Core 2 Duo
  Processor Speed:          2.66 GHz
  Number Of Processors:          1
  Total Number Of Cores:          2
  L2 Cache:          6 MB
  Memory:          8 GB

Technically, it is a different process.
When you use SHARE/EXPORT MOVIE or SHARE/MEDIA BROWSER, iMovie creates you finished movie in H.264. When you use SHARE to IDVD, iMovie creates an intermediate movie for use only in iDVD that is in DV codec (or AIC codec if the original footage was HD).
Intuitively, it would seem that staying in DV would give better results, but my experience has been the opposite.
Here is a quick and dirty video showing the use of the Media Browser in iDVD. I guess you could call it a pane.

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