There has been quite a few posts recently about DVD burners not being detected by PRE - myself included (v7). Uninstalling and reinstalling invariably fixes it for a while but I can't be bothered to do this because (in my case) it's a recurring problem.
I use the 8.5GB burn to folder option and then Nero or Imgburn to burn the disk (Windows and all other burning applications see the burners just fine). If I want to fit a longish DVD to a 4.7GB disk I still burn to 8.5GB and then use DVD Shrink to shrink the image.
Insanity is hereditary, you get it from your children
There are also troubleshooting steps in the FAQs to the right of this forum (as well as in the appendices of my books).
If you can't burn directly to a disc, you can even use Step 2 to burn create your DVD files and then use your computer's DVD burning software (Nero, for instance) to burn the VIDEO_TS folder to a DVD disc.