Been researching this issue and basically, DVD SP4 assumes that it is the video rate which is too high even if the error is being caused by something else. Essentially, the combined bit rate of one video track, all audio layers and all subtitle layers must not exceed 8Mbps (if using 5 angle streams or less). Therefore, with the two uncompressed WAVE file layers encoded using 1536kbps each (standard 48kHz, 16 bit) or effectively 1.5Mbps and with the AC3 layer encoded using 448kbps, or approx. 0.5Mbps, this gives a combined rate of 3.5Mbps, only leaving 4.5Mbps maximum for the video stream. Having the audio all encoded to AC3 solves this issue, which is what Apple recommend and this also then makes the files adhere to the standard DVD spec.
Have ordered the Apple Training Book on DVD SP4 which looks a good read.
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