ROBOTANK I'm aware of a couple possible solutions. There's an app called ReduxEncoder that's being developed based on VisualHub's code, and it also offers the ability to convert a video file into a burnable ISO image in one step. However, ReduxEncoder currently doesn't work very well. It's really buggy, and I haven't yet gotten it to properly complete a conversion to an ISO image (I've gotten it to create the MPG file, but it just stops before it creates the DVD structure and the disk image). It is a work in progress (and it's free), so it may be worth keeping an eye on. There are also two little shareware apps I know of, MovieConverterStudio and MovieGate, that convert video files then create menus and burn to disk. Though neither app creates ISO images directly, I imagine it would be simple enough to make a disk image with the VIDEO_TS folders they create using something like DMGConverter. I'm currently using MovieConverterStudio, and it generally works very well for me.
(Version 2.0.7)