For DVDs it's entirely up to you which of the three you use. They have various strengths and weaknesses.
DVD ISO uses the same ISO9660 filesystem as is used on CD-R. The advantage is that it the resulting disc is likely to work on any operating system that can read CD-ROMs. The disadvantage is that it imposes some limitations that are annoying on DVD - such as a maximum file size that is less than the capacity of the DVD.
DVD UDF uses the UDF filesystem that was developed for use with DVD. The advantage is that the limitations of using the ISO9660 filesystem disappear. The disadvantage is that the operating system needs to have UDF support - Windows 2000 and XP are fine, but some older versions of Windows don't have UDF support "out of the box".
DVD UDF/ISO records a so-called UDF/ISO Bridge disc. This is a disc that's both UDF and ISO. Where possible, systems use the UDF filesystem on these discs (Windows 2000 and XP certainly do). However, you get the ISO limitations back again.
I tend to use DVD UDF - but many use DVD ISO unless they get a warning that what they're wanting to do is impossible on an ISO DVD. DVD UDF/ISO is, I suppose, the maximum compatibility option.