I have only made a few VCDs with PSG and they have played fine. Try to make a VCD elsewhere and see if the Panasonic likes it
My tuppence worth:
I have PSG 2.5 and 2.6 on different Winxp installs and have found ver 2.5 a lot more stable but not 100% so.
It does crash occasionally so its a good idea to save as you go along otherwise you might lose a whole project you just spent the last hr on.
Occasionally ( rarely) it hangs at the crucial Make DVD stage.
However, it can make images (ISO) which are less likely to make it crash and can be burnt using any Burning program later ( including Nero)
All programs can do this though (crash) so I always try to make a DVD folder or Image I can resort to if the actual disc burning operation fails:
That way I dont need to go thru all the rendering and multiplexing again
Ulead MovieFactory 5+™ is affordable and fantastic for making good quality DVDs: ( it is seldom ever unstable and I highly reccomend it)
I mention it because PSG is great at making slide shows ( esp with motion effects and transistions with little effort and skill but its DVD authoring can be weak.( like most built-in DVD tools). Movie Factory itself can make slideshows but I seldom use it for that purpose
I have ( for a while now) found it convenient to make an mpeg2 in PSG and author the final DVD in MovieFactory. This way the problem of multiple chapters not playing ( as mentioned above) is bypassed. I started doing it this way when a DVD made in PSG would not play and I had to repeat the whole project

!!
In fact if I do a Video and Photoshoot of the same or a complimentary occasion, I use some stills for the video edit or grabbed frames ( from video) as stills .I then edit the video and output to mpeg2,
The photos then get turned into a slideshow in PSG and then output to a "DVD ready" mpeg2.
From these 2 sources I then create a DVD video in Moviefactory from the mpegs files.
It works a treat and you could put several slide shows from PSG made at different times on a DVD video . Only your imagination or creativity is the limiting factor.
Give it a go
I quite like PSG and have used it for a few years now. I have tried Ulead CD/DVD Pictureshow™ and a few other program ( one by Magix) and found PSG competes well.
PSG is not perfect but it does what it says on the Box ( very well)

and most problems have a workabout. I have a small video tutorial ( from a mag pm me if you would like to have a look at it.)