make a dvd mpeg with mencoder

To make a dvd-compliant file without re-encoding it:
$ mencoder -mc 0.1 -of mpeg -mpegopts format=dvd -oac copy -ovc copy -o "The Biggest Hits - Right Now.mpg" "The Biggest Hits - Right Now.ts"

to make a dvd-compliant file re-encoding the video stream (re-encoding audio doesn't make mush sense)
this is the very tweaked command line I use (change bitrate with the value you want, in kilobit/second)
$ mencoder -of mpeg -mpegopts format=dvd -oac copy -ovc lavc -lavcopts qprd:keyint=25:vcodec=mpeg2vid

eo:mbd=2:vbitrate=$BITRATE:lmin=1:mbqmin=1:vqmin=1:vqmax=12:mbqmax=12:dia=-4:predia=-4:preme=2:vmax_b_frames=1:sc_threshold=-1500:vrc_buf_size=1835:vrc_maxrate=9800:cmp=256:precmp=256:subcmp=256:mbcmp=256:qprd:vqcomp=0.75:subq=8 -o "The Biggest Hits - Right Now.mpg" "The Biggest Hits - Right Now.ts"

the above command encode in 1-pass with suboptimal results;
if you want to encode in 2 passes repeat the same command twice appending :vpass=1 the first time and :vpass=2 the second time.

To encode to mp4 you had better ask someone to mencoder-users.

Now that you know a basic command you should read the man page and tweak the encoding process as you _really_ need
(denoise, deinterlace, etc).