You’re unable to import an MPEG 1 video file into your iDVD project. QuickTime Player can read and play the file, and iDVD Help says: “You can add any video or image file supported by QuickTime to your iDVD project.”
iDVD 1.0 cannot read MPEG 1 video files. The Help file is in error. You may be able to convert your MPEG 1 video files to a different QuickTime format that iDVD can read by using the Cleaner 5 application from Terran.
Terran is definitely not around anymore, but you can read about Cleaner 5 here.