ffmpeg -i video.mp4 -vcodec libxvid -b 800k vid-xvid.avi
This says compress it using the libxvid codec and set the bandwidth to 800kbits/sec - which looks ok whilst still compressing well - feel free to play with this though don't too high (e.g above 5Mb/s) as DVD players can have trouble playing it back. The name of the output file is vid-xvid.avi. I have found this format to be slightly better supported, although it slower to convert than the DIVX.
If you want to compress to DIVX use the following:
ffmpeg -i video.mp4 -vcodec mpeg4 -vtag divx -b 800k vid-divx.avi
This says use the mpeg4 codec to compress and mark the output video with the DIVX fourcc tag which will let the DVD player know it is DIXV video.
The the file can be burned to a DVD using your favourite DVD burner app - usually using the operating systems default one. To make it easier on the DVD player use names with 8(.3) characters that are then followed by the .avi suffix.
[14sept11: Corrected some minor errors]