Here is what I do for my Digital8 transfers:
1.) I transfer the video raw as an .AVI to the harddrive using the free program WINDV.
2.) I then convert it to MPG2 using TMPGEnc Xpress 3.0 (it has a trial version).
3.) I convert the MPG2 to DVD format (.vob, ect.) using TMPGEnc DVD Author v1.6 (it has a trial version).
4.) I burn the files created by TMPGEnc DVD to a DVD using Nero.
There are all in one programs that make things easier, but this method is so I can retain the maximum video quality throughout the conversion. I also use Adobe Premiere to edit the raw .AVI file in between steps 2 and 3 if I'm putting together multiple segments of video for wedding, ect.
There are excellent tutorials on www.videohelp.com