A playable video DVD has two directories, VIDEO_TS and AUDIO_TS.
AUDIO_TS is always empty. Some video DVDs don't even have it, yet they still play.
VIDEO_TS is where everything is stored, both vision and audio, multiplexed in with the vision. It contains .VOB, .IFO and .BUP files. All three must reside in this directory for it to be a playable video DVD.
"DVD Authoring" is the process of converting your MPEG file into the necessary VOB, IFO and BUP files. Authoring software is readily available. (I use Sony DVD Architect - good software.)
Basically, the actual playable files is the Video Object File, or VOB. Each VOB doesn't exceed 1GB in size, and if the DVD needs or has more than one VOB file then they are contiguous, and play seamlessly. Naturally, each menu-item is associated with a single VOB file, so the player can jump straight to it when you select it from the menu.
The IFO file is the table of contents which the player looks up to see in which order to play the VOB files. Also, if the DVD is menu-driven, information about menus etc is contained here.
Naturally, the IFO file is very important, and if it is corrupted (for example by a large scratch) then the BUP file comes into play. It is just a backup of the IFO file. If the IFO file can't be read, the player looks up the BUP file. If it is corrupted as well, the DVD is unplayable.
There may be several VOB filles, but only one IFO file and one BUP file.
Converting an MPEG file into VOB, IFO and BUP actually makes the resulting filesize larger. If I render a production to 3.35Gb as an MPEG file, once authored to VOB, IFO and BUP files it just neatly occupies 4.7Gb, perfect for a single-layer DVD. Actually, Nero allows me to over-burn to a maximum of 4.9Gb on a single-layer DVD. Nero burns ISO-format files, and the VOB files cannot exceed 1Gb under this standard. Each Nero burn gets an ISO-DVD number. I include it on all my DVDs I produce, as well as my copyright where applicable.
Many DVD players will play MPEG files, but you won't be able to insert menus etc, since they are created at the authoring stage rather than the initial production stage.
As I am involved with video production (from camera-work right through to authoring and burning) I will refrain from commenting on "ripping" DVDs and breaking copy-protection.