Assuming you have no compatibility issues with homemade DVDs, then the obvious advantage of DVD is the video quality. If you render to a high bitrate (around 8Mbps) MPEG2 file then you should get an excellent picture on your TV screen.
VCD is MPEG1 at 1150Kbps and suffers from all the usual edge and block artifacts, especially with moving images and high levels of detail. Encoder software like Procoder can give very good results for VCD, but compared to MPEG2 there is still a large gap.
DVDs, even homemade ones, are more likely to be compatible with a wider range of players than VCDs are, even if all else including bitrate is the same. DVD media can also be read faster than CD media (because the bits are smaller so they go past the lens faster), so there is more time for the player to correct or re-read if there is a read error.
Actually, you could probably burn as small a project as this to a CD-R or CD-RW as a MiniDVD. A MiniDVD is just a short DVD burned to a CD-R or CD-RW. If your DVD player supports MiniDVDs you can save considerable money with MiniDVDs simply because the CD blanks cost much less than DVD blanks. Putting small 500-Meg projects on a DVD-R or DVD-RW wastes a lot of space. However only about a third of settop DVD players will play a MiniDVD. But MiniDVDs have full DVD quality because they are just short DVDs. It might be worth experimenting to burn a MiniDVD and see if it works in your system.
I think compatibility also depends on what country you are in. In Asia, for example, VCD has been much more popular than DVD, at least in the past, so the compatibility of VCD with stand alone players is very high. There are also many VCD-only players around that will not take even commercially produced DVDs.
I didn't see anyone metion it, so I will... It depends on your source file. If you're starting with a low bitrate MPEG-1 source then putting it on a DVD won't make it "better" quality wise. However if you're starting with a higher quality source like from a DV camera, then sure, DVD is a better choice if you stay with the higher bitrate.