Ac3 ISN'T the only option. You also have the option of PCM but it's MUCH larger.
As for why MPEG2 audio isn't supported, it's not required to be supported by DVD players in the US - PCM and AC3 ARE required. So, in the US, it is NOT a standard DVD format (although most likely a large percentage DO support it)
Rats,...I have used other DVD authoring software that DO allow you to keep MPEG layer2 audio. (like Ulead)
It just stinks that I have to recompress the audio of these MPEG files again.
I would like to see a feature that allows me to "force" a non-recompression option of whatever material that I want. Even if it falls outside the "normal" media settings and will not work on some DVD players. A simple warning flag would be OK.
If you are rendering from Vegas, then you shouldn't be rendering the audio as part of the MPEG - you should just render directly to AC3 or PCM and thus avoid the recompression step entirely