We have noticed this error when using MPEG files created with other software programs (eg., Power Cinema 2.0). Other applications that create non-compliant DVD MPEG files may also cause this error message in Studio.
Currently when the MPEG file is not DVD-compliant, Studio does not detect this situation until the compile phase. This issue will be remedied in a future update of Studio software. To workaround this error, change the settings for Power Cinema to produce proper DVD compliant files (ex, GOP length of 15 or less).
Other workarounds would be to force Studio to re-render the non compliant file. One method would be to render the project as an MPEG file using the DVD compatible setting, and then import that file into the Studio project. Alternatively, the customer could put a blank title across the entire project, which would also force rendering.