Ive been making DVDs for my niece and nephew of their favorite cartoons, and one thing I do for them is make a nice background with their pictures shopped into a scene from whatever cartoon is on the DVD, and I've been using Nero 8 to do it all. I'm a bit unhappy with the options Nero 8 gives, it seems so limited to what I can really do with it and was wondering if anyone had any recommendations for software that gives more freedom and customization that doesn't limit my creativity?

http://www.cyberlink.com/ They sell software which may be what you are looking for...

If you want to Creator a DVD disk and edit the video files. You can try Imtoo DVD Creator.This DVD Creator to help you easily finish all the tasks quickly.http://www.sharewareguide.net/Audio-Multimedia/Multimedia-Creation-Tools/imtoo-dvd-creator.html

You can try Xilisoft DVD Creator to do the job, it alway works well for me. It can convert popular video formats such as AVI, MPEG, WMV, DivX, DV, VOB to DVD and burn DVD movie playable on portable or home DVD player. you can free download here: http://www.kooksoft.com/Xilisoft-DVD-Creator_703.html Here is a step by step guide about how to use it http://www.kooksoft.com/How-to-convert-MPEG--DivX--AVI-to-DVD-with-Xilisoft-DVD-Creator-_914.html Hope can help you :)

You can try Burn - burning application for Mac OS X for FREE. I know this DVD Creator for Mac can burn and convert almost all popular video formats such as FLV, MPEG1, MPEG2, MP4, DAT, 3GP, 3G2, MOV, AVI to DVD. Besides, you can also edit the video by changing effection, edting the title and adding background music as you like.

I recommend Cucusoft Video to DVD Converter (DVD Burner).It enables you to convert and burn any video file directly to VCD, DVD, SVCD, MPEG1 and MPEG2 format. It is fast and easy to use. Download it and read its step by step guide.