I am getting ready to upgrade my Video Factory to VV3. After I doing this, and creating mpeg2 files, will I still need to use an outside program to create chapters and menus?
Yes, you’ll need to purchase a DVD authoring program to add chapters and menus. The VCD support in VV3 just burns the mpeg file, which then plays back like a VHS tape. VV3 doesn’t burn DVD or SVCD at all.
You might want to look into Ulead DVD MovieFactory which is on sale for $24.95 boxed at the Ulead site. You can download a 30 day trial copy to try it out and see if you like it. It will accept MPEG2 files from VV3 and add chapters and thumbnail menus. It does not do text menus; just thumbnails from pre-canned templates.