What capturing setting should I use in order to get the best quality and also burn in DVD format? I used the recommended Windows Movie Maker format which was WMA but my DVD tools didnt accept it.
You need to stick with original format i.e. DV (AVI) to edit, render & burn to DVD. Files will be considerably bigger than WMA/WMV but will retain original quality. Your DVD software should be able to compress files for burning to disc if they're too big.