MPEG-2 or H.264

Hi-
I have about 1.5 hours of HD footage and 25 chapters to fill a DVD. I read that H.264 is the much better encoder setting, but the DVD will only be able to hold 50min. Is this true? And if so, is encoding to MPEG-2 that much worse?
Also, I read that compressing the audio separately will also lower my file size. What bit-rate or compression setting should I use for the audio?
Thank you!
ps. I have DVD Studio Pro 4 (FCP7)

Before you get started you need to know this. DVD SP allows you to create SD DVD discs and HD DVD discs. You need to go into the Preferences for DVD SP and choose BEFORE you start creating a new project.
An HD DVD will only play on Macs and a few, now obsolete Toshiba HD DVD players. They will not play on PCs, stand alone DVD players, or Blu-Ray players. An HD DVD can play H.264 or MPEG-2 files at HD resolution.
An SD DVD player will play on Macs, PCs, DVD players and Blu-Ray players. It is limited to SD resolution, but every single DVD you have ever owned/rented/watched has been a SD DVD. SD DVDs will only play MPEG-2 files.

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