Dual Layer Dvds - bad compression, or something worse?

Hi,
I've recently been trying to burn a double layer dvd in disk utility but the video seems to have been over compressed into one layer?
I know my Macbook Pro is capable of doing the dual layer, but I can't find a setting anywhere for it.
Other cds and dvds will burn ok...
is it because I'm using a disk image on my hard drive?
Any help would be appreciated - I've been having a good look around but I can't find anyone with my problem!

The original post needs clarification to determine what the user meant. Generally speaking, there's data compression at the front-end when encoding information for storage on a video DVD - the conversion of source video into the MPEG2 format. There are two constraints, the permitted bit-rate of DVD video, and the size of the disk. When encoding, the user can specify the size of the target disk. If using iDVD, it won't permit your video to be over 2 hours long.
One thing to keep in mind is that if the source video is not noticeably higher-than-DVD-quality, the resulting MPEG2 compressed video stream will look noticeably lower quality. For example, if you have MPEG4 video from an AVCHD camcorder, the transcoding to MPEG2 will really degrade the video. None of that has anything to do with dual- versus single-layer disks. Further, Disk Utility doesn't do anything but copy bytes from the image file directly to the disk. It's oblivious to what it is writing and doesn't modify the content or encoding in any way.
However, in response to the above comment, it should probably be pointed out that the poster lives in Australia, where copyright rules are a little different. Specifically, the user's permitted to make a duplicate of a commercial DVD for a reasonable personal use (backup, copy for the summer house, etc.), the user is also permitted to "format shift" a work (transform it so that it may be replayed on a device that could not display the work as presented on the original). Unlike the USA, an individual can circumvent access controls on the media to do so. Of course, this is limited to fair and reasonable personal uses -- you can't share stuff by P2P or whatnot.
FWIW - Quite a few legal scholars believe the restrictions the US puts on "accessing" a work are not constitutional. The US' "Digital Millennium Copyright Act" rules regarding access controls (encryption, region coding, etc.) have never been tested in court. I suspect that would fail namely because the US law, as written, also restricts access to works in the public domain (if you've a DVD with a public domain film, but it's encrypted, it's against the law to decrypt it), and because the US has entered into treaties that, among other things, prohibit legal protection on restricting access to works based on their region of origin.
But, I digress.

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