VCDs are basically video files of the MPEG-1 format (in certain settings like 352x240 resolution, 23.976, 25, or 29.97fps, etc..). If your MPEG video files meet the standards for VCD, you can burn them directly to VCD using Nero 5.x or Easy CD Creator 5. If the MPEG files do not meet the standards for VCD,
or when using a video file that is not MPEG (i.e. AVI, DivX, etc.), Nero 5.5 will re-encode them so that they meet the standards before burning, then burn it in one swoop. AFAIK Nero doesn't allow you to control the compression it uses for encoding, so there's no clue of if the framerate will match, the audio will be in sync, etc.. So, I prefer to use
TMPGEnc for encoding, then using those files with Nero to burn onto VCDs. Extensive instructions are available at
VCD Helper,
Doom9, and
Digital Digest.