Yes Dave, they are a scam. At best they will just provide you with links to doom9 or divx digest. Now it does work. I do it all the time. The best program I have found is Gordian Knot. Go to www.doom9.net for more info.
And you're not burning a DVD, you're reencoding it to another format (DivX, VCD, SVCD) then burning that... It's a scam since you can get all the programs required to do this for free.
You could make a dvd into a vcd or svcd for playing on a stand alone dvd player. But making it into a divx format .avi file gives you fantatstic quality and allow you to keep the 5.1 sound track if you want. You can only play these back on your pc but if you have tv out?! Heh, Heh, say goodbye to my vcr.
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