I've had a similiar problem as "pat-rules" with version 1.2.3. In particular, I have been completely unable to receive output below 5.65 gb for "Manhunter: Restored Director's Cut" (region 1).
I tried lowering the output level to a very low 1000 gb, but still received the 5.65 gb output size. I attempted to check for seamless branching or other nonsense in IFOEdit. Even after correcting the original IFOs, and creating new IFOs, I was unable to break the 5.65 barrier. Reprocessing back through DVD2One has only a very negligible effect on final size.
I have been a loyal DVD2One fan since version 1.0.0, successfully creating nearly 200 discs. Only since version 1.2.3 have I had any problems with file output size. Fortunately, I have found work-arounds for the other problem DVD's (such as "Terminator 2: Extreme Edition.") The only difference I can see between this and other discs that I have processed is that "Manhunter" was recorded with the new "Divimax" format.
(With few exceptions, I use DVD Decrypter in file mode, DVD2One, and Nero to burn.)