My bet is that the authoring program you used to create the DVD actually converted the WMV file to MPEG-2 for you. If you look at the DVD you created and see only an AUDIO_TS and VIDEO_TS directory, with .VOB and .IFO files in the VIDEO_TS directory and no WMV files anywhere, then you can be certain that the conversion was done.
The color space used by a PC monitor is quite different than a TV, so it's not a surprise that you're going to see some differences between the 2.
"My bet is that the authoring program you used to create the DVD actually converted the WMV file to MPEG-2 for you"...
- You must be 100% correct. That's what I thought.