How do I author a playable DVD from an MKV file containing MPEG2 video, audio, subtitle and chapter streams?
DVD requires more than just the video and audio data streams.  It also needs all the menu and table of contents data to instruct the player on how to play the stream.  As long as the stream is in an appropriate format, there is no reason that a DVD authoring package should have to re-encode the video.  It just needs to take in the stream and rebuild the menu and table of contents information that is needed to tell the DVD player how to play it.