I know yours is a old post, but like you, the idea of combining sets of movies onto a Standard Definition Blu-Ray is a great idea. It is now a more cost-effective process then back when you first listed your post. But, I am really finding it hard to find the right software. The videos I want to transfer are already on my hard drive as an .mpg (MPEG-2) file.
The problems I am encountering are the software not recognizing the .mpg files, the "authoring" process tends to breakdown before being completed, or the software will not allow standard definition; it wants to convert everything into high definition. The challenge is getting standard definition on a Blu-Ray with the same quality as on a DVD.
Any ideas or letting me know what you are using would be greatly appreciated.