From gavynj on Macosxhints.com:
After searching the forums and trying various things, I still couldn’t find a quick, reliable, free method of burning a VIDEO_TS folder to a pure UDF DVD, so that it would play in regular DVD players, as well trigger DVD Player to start up automatically. Anyway, as often is the case, Terminal had the answers. Just type in this command and change the paths to suit:
hdiutil makehybrid -udf -udf-volume-name DVD_NAME -o MY_DVD.iso /path/to/VIDEO_TS/parent/folder
Make sure that /path/to/VIDEO_TS/parent/folder is the path to the folder containing the VIDEO_TS folder, not the VIDEO_TS folder itself. Once the .iso file has been created, drag this to Disk Utility and hit the Burn button.