The way I show you is the way I always do it........
First Screen Shot:
Make the settings as shown (though you can also use other settings).
Second Screen Shot:
Rightclick the file and choose :Specify the output folder destination
Now you can actually press "Encode (active job list)"
Third Screen Shot:
You can check the file about its specifications by double clicking it (this might be useful if you want to burn a VCD; though I haven't used it a lot because I got always good results by just choosing VCD vob compliant).