I usually have less than an hour footage to burn on a DVD with DVDA.
This time I have 2 1/2 hours and I would like to know if I need to render it in Vegas in some kind of different way so that the quality is still good but still fits on the DVD.
You can do it in Vegas but the final quality will depend a lot on how good your source material is.
My bitrate calculator gives the following VBR settings:
Min: 2,224,000
Avg: 3,712,000
Max: 6,496,000
This assumes you're using AC-3 audio.
Due to the pprogram length, you definitely want to do a 2-pass render on this.
It will take longer but should result in better quality.
Try rendering a short piece with these settings, burn it to an RW and see what it looks like.