4.7GB is meant to be divided into 4GB for Video and 700MB for PCM audio (uncompressed). If you take away the over head space, that leaves you with about 3.9GB for video and 600MB for audio.
In Vegas render your timeline to MPEG2 and configure your own profile DVD Arc. video only profile with VBR encoding, set your max rate to 6mbs and average to 4Mbs to start. If that file is still to large reduce the max to 4 and average to 2.5 or 3Mbs. If your video content is talking heads, does not contain a ton of pixel change, the bitrate can drop pretty low.
For the audio render your audio to AC3. AC3 is effectively mp3 compression, vs the PCM standard audio.
Get both files such that they fit into the 4GB space. <4GB is generally desired, since the error rate on most DVD discs starts to climb near the outer edge of the disc.
If you use the DVD as storage media (DVD-ROM), you can export to MC or SonyAVC.mp4 which will get you like 4 hours or more of video on a single disc depending on resolution and bit rate.
To follow up on astar's tips, here's the VBR numbers I get for a 2 hour program from the bitrate calculator I use all the time.
MAX: 8,000,000
AVG: 4,576,000
MIN: 2,744,000
AC-3 set to 192 (the default setting)
BTW, I make a few changes to the default settings by clicking the Settings button (lower left) on the main screen.
Click 1 Kilobit = 1000 bits.
Set the Default Audio Encoding to 192 Kb/s (this is the default for Vegas AC-3 audio encodes).
Change the Safety Margin from 1% to 5% (I like to give myself a bit of extra room).
Mike's numbers look about right; I like to leave a bit of headspace on the disc.
192 is fine for AC3 stereo, but 384 is a good default for 5.1 (you do not need to put two audio tracks on the disc).
Keep in mind that 4.7 GB from the media manufacturer actually means 4.35 GB to the rest of the planet. It's a sales gimmick. There are online bitrate calculators that will help you with this, I use the one from videohelp.
"4.7GB" is 4,700,000,000, the base10 number of bytes, the same way that hard drive makers label their capacities. In the computer world, capacities are often expressed in binary units. A "KiB" is actually 1,024 bytes, a MiB is 1.049 x 10^6, and a GiB is 1.074 x 10^9. Officially the terms are Kibibytes, Mebibytes, and Gibibytes. So a 4.7GB disk contains about 4.38 Gibibytes.
I have burned many hundreds of disks and burn out to the edge with no issues. I've used the simple formula 600 / time = average total bitrate. In this case, total bitrate = 5Mb/sec. Take away 0.2 for ac-3 audio and you shoot for 4.8 as the average video rate. Max of 8, min of 1.
And it makes a big difference which brand disks you use. Verbatim, Falcon, TY.
At this low average bitrate you may see artifacts in certain scenes. Alternatives are to use double-layer Verbatim disks or a better MPEG2 encoder. But you'll probably be okay.
For 2 hours video, according to my calculation where I use the size of 4.5GB (4.500.000.000), added with 4% safe size overhead, plus audio 192kbps, I got 4.61 Mbps.
They have for some time. Originally they all used what is often now called Kibibytes and Mibibytes. At some point one of the manufacturers switched to decimal megabytes from the computer industry "binary" megabytes. I cannot remember who started it. This is so they could sell a 320MB HD compared to someone else's 300MB HD even though both were the same size in bytes. They just had fine print that defined what they meant by "MB". That industry then fully moved from the original MB to the now current MB definition.
Memory being tied to binary addressing remains the traditional MB, or MiB.
What "looks good" on a 2 hr dvd has more to do with the source complexity than the media size itself.
A slideshow will always look pristine. Same for talking heads, product shoots, and most scenics.
Ocean waves, fast-motion sports, and grain, not so good. This is where 2-pass VBR (using Mike's numbers) is at its best. The 2 Mbps minimum bitrate tames most blocking in shadows and fades. The maximum bitrate is for those bursts of complexity, but sustained 8 Mbps is about all we suggest for optical players. The older CM home players would literally smoke if you gave them CBR at that bitrate.