T0nee1 is right. If it is an mpeg2 in dvd format, DVDShrink is a good, fast solution for what you want to do. If it isn't already in dvd format, I believe Power Director will output as a dvd, then you can reduce the size.
There are some free dvd authoring tools you could also use, like DVDStyler or GUIforDVDAuthor if you can't seem to get Power Director to cooperate.
Another choice to reduce the size of the video would be DVDRebuilder. There is a free version of Rebuilder and it includes a couple of free mpeg encoders. I'd use the HC encoder. This process would take a lot longer than Shrink, but the quality you get on most dvds will be slightly better. For the very small amount of compression you need on this particular video, the difference wouldn't be perceptible.