Well...good game.
Ok, so following the advice of Grayhaze, I dl'd the latest MMC stuff from ATI. (I had uninstalled all that stuff last year because it wouldn't let go of the file associations). I installed the newest codec pack from MS first and then installed the MMC.
Created a DVD high quality .mpg file. Neither WMP nor the ATI player could even open the resulting file.

Made an .mpg file described as really great for full TV resolution. Neither player could read that either. I converted those two files to AVI (MPEG 4), great picture, no sound.
Made an MPEG 1 file and no problems, but very small picture. So...an MPEG 2 codec, it would seem, is what is missing. Went in search of MPEG 2 codecs. Found one, installed it. Now WMP opens the DVD quality mpg file, the sound is perfect, but only the first frame of the video shows. The ATI player still won't open it. Ok, so this all sucks. I'm hoping that my friend with the DVD burner is going to be able to do something with the DVD quality file. Ooops...video file is 730Mb and cd-r only holds 700 Mb. Winzip to the rescue. Reduces the file to just barely under 700. Fits right in there. I also make another .mpg file in a quality which is described as perfect for making VCD. It's mpeg 1 so it plays fine and it fits on the cd with no problem. I'm giving all this to my friend tomorrow and hoping for the best.
I checked all the codecs I have installed and noticed an MPEG 4 codec from MS. Why can't it play an mpeg2? Not backward compatible I suppose, or, which is quite likely, I have no idea what I'm doing
Hi WOM and Stumpy!!!!
Thanks for all the advice and I'll look in here tomorrow for that device name DesignCaddy. I'm not really sure how much of this I'll be doing, since I don't personally own a DVD burner, but you never know.