The answer seems to be add a picture. Worked for me too. Go figure.

Apple - Support - Discussions - Share to iDVD not enabled ...:

Re: Share to iDVD not enabled

Did a re-install with Apple support of just the imovie/idvd bits - still no joy.

What we did find though is that adding a single image (gif/png) to the movie makes it work, share to iDVD becomes enabled... wierd!

Must force some sort of conversion/recognition. *shrug*