DL DVD+R's can be copied and shrunk w/ DVD Shrink...it isn't that hard to do. Yes they're still up in price, the whole project will cost you a fortune! I would just use single layer DVDs for .80 each.
Then your DVD Writer isn't able to write the MacroVision bits. I have tested Adobe Encore and both my drives (NEC & Sony) are able to write them.
I believe it is just a "flag" either set ON or OFF...anyway you want to use Type III if you're using NTSC no VCR can copy that.
It should be working but you won't really see it, try "recording" on the tape and also make sure you aren't using a MacroVision free DVD player. If this doesn't work you'll have to contact macrovision.com or simply not use it.
I think the whole idea is rather pointless, but what do I know.