The size of the MPEG-2 file, not the length, determines what will fit. Generally, 4.35GB is at the top end for one movie on DVD5.
The size of the file is determined by the Bitrate x Length. Two hours is about as long as I would put on a single DVD, because of quality considerations. A useful calculator to help you determine this can be found here:
I see you are using Vegas Pro 9 (previous message deleted).
This will give you two hours at acceptable quality (although nothing like your AVCHD media):
-- DVD Architect Widescreen NTSC template
-- Quality slider 31
-- Variable bit rate
-- 2 pass
-- Max 9,500,000
-- Av 4,850,000
-- Min 1,500,000 (default is inadequate)
-- If your AVCHD is Progressive, set Field Order Progressive, otherwise leave it alone.
-- If your AVCHD is Interlaced, you must set a Deinterlace method in your project. Post back with your full media properties
-- Render quality Best (necessary)
Just make sure you change the bitrate to the appropriate value for the length of your video. The default settings will not give you 2 hours. You need to use a bitrate calculator to determine the proper bitrate for your length. For two hours, that would be around an average of 4,825,000.
If you don't mind, I'd like to contact you outside of the forum to ask a question, but you've not provided an address in your forum profile. If you're agreeable to this, would you please contact me through the email address in mine?
I just don't post a lot of stuff in my profiles because of the database hacking and subsequent personal threats made through another video forum several years back (I know a few others here who will remember that one).