It took a few hours, but I have MythBurn (a web interface for creating DVDs with MythTV) finally working. The problem was that the mjpegtools shipped with Ubuntu Dapper crashes with an invalid free(). Compiling from source fixed that.
Update: I might have lied. I now have troubles getting Xine to playback the DVD when I mount the ISO image through a loop back. I don’t have any DVD media handy, so I will have to wait a couple of days until I can do more testing. The symptom I see is that the intro MythTV screen plays, and then Xine freezes before displaying the menu.