VLCSout

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http://wiki.videolan.org/index.php/VLCSout

From VideoLAN wiki

The VLC Streaming-Howto document is the current complete guide to the VideoLAN streaming solution. Further details and examples are going to be added here soon.

Using :VLC to create a DVD

Format a file into a .mpg, mpeg ps encapsulation, mp2v video [4 mbps].
For audio, mp2a 2-channel 192K works well. If you need more channels, use a52 and increase the bitrate; budget 64 or 96K/channel (2 channels 192K, 6 channel 384K,…
A DVD format file should be 720x480 resolution for NTSC (US), or 720x586 resolution for PAL.
Set the —sout-transcode-fps to match your target, using 30 for NTSC, 25 for PAL.
Set the —sout-ffmpeg-keyint to 16 (possibly not needed, but I use this and it works)
Use the —aspect-ratio switch to control things. For instance, a Webcam or framegrabber with 640x480 or 320x240 resolution has an —aspect-ratio of 4:3. You need to specify this so that the transcoding doesn't make the output video "fat", stretch things to fit the wider DVD width. Standard DVD "letterbox" has an aspect ratio of 16:9.
Here is a sample, in Windows. The .asf source movie is 640x480 frame grabber.

vlc C:\Movies\DiveModules1to3_2Mbps.asf —sout=#transcodemp2v,vb=4096,scale=1,acodec=mp2a,ab=192,channels=2:duplicatestd{access=file,mux=ps,url="C:\TEMP\Dive1_3_out.mpg"} —aspect-ratio "4:3" —sout-transcode-width 720 —sout-transcode-height 480 —sout-transcode-fps 30 —sout-ffmpeg-keyint 16