Final Cut Sequence to Compressor to DVD Studio Pro

Running latest FCP Studio apps. Have a sequence fully edited and mixed (via Soundtrack) and sent the file to Compressor for output to DVD Studio Pro to create the DVD. I used the H.264 for DVDPro compression template (H.264 for DVDPro - 120 min) setting as provided by Apple. The compression file worked like a charm. I have the file and it plays beautifully in QT player. However when I try to add the asset or import it into DVDStudio Pro it says it is in an incompatible format. What gives? Shouldn't the template know how to render/compress the movie if the template setting is supposed to be in DVDStudio Pro format? Scratching my head on this one. Any pointers would be of great help.
File particulars: 3 1/2 minute movie (film student project) that was sent to compressor as a sequence file. Encoder template is set up for MPeg2 format using 7.34Mbps Average Bit Rate/23.00Mbps for Maximum Bit Rate/2.0 seconds for Frame Sync and Multi-pass and Include PCM Audio are checked (all are the default settings as provided by Apple).
Message was edited by: William Lutes

That would be a reasonable except that when I used those preset settings the file was unplayable by Quicktime OR DVDSP. QTPlayer wouldn't play it (as it was unrecognized file format) and DVDSP wouldn't import it. So I am at a loss on how to use compressor with the DVD setting templates. All I need is to compress the 3.5 minute movie file in a format that DVD Studio Pro will import and allow me to build and press to a DVD for family members to watch. I should add that I exported (via the Quicktime option in FCP) a movie file and then brought it into DVDSP but when I built the DVD it encoded the movie file in a very weird way (strange flicker when close up shots played on screen). When I just tried to change the encoding settings (in DVDSP) to allow for the least amount of effect on my file (basically the movie is only around 500mb uncompressed so a 4.7 blank dvd has more than enough room) DVDSP encoding still encoded the file in the strange flickering artifact manner.
The project is basically a simple menu with two options one to view the 3.5 minute movie file and the second is a 5 min behind the scenes explanation of the project by the director. All together the project file in DVDStudio Pro is around 650mb. So, the question now becomes: should I be bothering with Compressor at all and if I eschew its use then what can I do in DVDStudio Pro's encoding to have the least effect on the movie file (which plays fine without any flickering artifact before DVDSP gets its hands on it to build the DVD).
Any ideas? Thanks for chiming in btw, I do appreciate it.

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