How do you define quality?
MP4s and AVC-based videos give a more efficient compression. Less damage is done to the file when compressed, even if you have a smaller file. MP4s are also usually progressive frame, which looks better on computer and on progressive frame TVs.
MPEGs are the standard compression for DVDs. They traditionally use interlaced rather than progressive frames -- which tend to look better on TVs than on computers (although that too depends on which media player you're playing your video with).
DVD players play VOB files, which are a form of MPEG. However, some disc players can play other video formats -- and BluRay players can be VOBs, AVC video and some BluRay players can even play MP4s.
But there are so many variables in all of this that there is no straight answer. Especially when you ask about "quality", which is a rather subjective valuation that could mean resolution, bit rate, compression level or color reproduction. And, when you're comparing MP4s to MPEGs, there are many factors to consider.
Thanks for the information
When I actually came to burn a DVD (or rather a DVD ISO image which I subsequently burnt using ImgBurn), it was rather simple:
With DVD / SD 576 it offered Format=MPEG (there was no alternative), Frame Rate=25 (PAL) - thats OK - Quality=Min (cannot move it) & "Fit Contents to available space" was checked.
Now that this project is completed its back to working on my HD videos