Thank you. Now we are getting somewhere ;-)
So the DVD recorder deck probably recorded at 8mbps (1 hour mode). That would fill the DVD. Then you converted to H.264, which is a more efficient codec than MPEG-2, so the resulting .mp4 files were smaller, then in Encore they are being transcoded back to MPEG-2 (required to meet the spec) and are thus larger again, closer to original size. Maybe they started at 8mbps, went to 2mbps as .mp4, then back to 6mbps as MPEG-2 in Encore. That makes sense. Extra encoding steps will only serve to reduce final quality.
Why the encoding to H.264? DVD requires MPEG-2 DVD format, which you can export from Premiere. Just encode that way, and when you bring those files into Encore they will not need to transcode, therefore should not change size.
In fact, if memory serves from work I did several years ago...if you use the free MPEG StreamClip software on a PC, I believe that may be able to take the .vob and rip that to .m2v and .wav (or .ac3) and then you'll put those assets into Encore with NO transcoding at all, keeping originally captured quality. Unless of course you need to do editing in Premiere, then you would need to encode to MPEG-2 DVD after that step.
Thanks
Jeff