iDVD, upon importing the exported video (and I think it can be exported as nearly anything in the quicktime export option and the proper markers will survive) will create a 'play movie' and also have a button for selecting chapters from a auto-generated screen full of chapters. You can then change what picture or clip of video is shown for that submenu, but it's not frame-accurate- trying to scroll with the mouse (especially for a longer video) or pressing the left and right arrow keys usually jumps many frames forward or back.
There's also the 'best quality' vs. 'best performance' option, I couldn't fit a 70 minute video with 'best performance' enabled so I had to change it from that default. I probably wanted 'best quality' all along anyway but I didn't know about it until it complained about the length of the video under the old option.
DVD Studio Pro
I have tried making a video with DVD studio pro, mainly to be able to create chapters before I knew the above steps, and also because an earlier version of iDVD was not exporting the 16:9 video correctly- it would look normal widescreen for five minutes and then it squeezed the video a little so there would be black vertical bars on each side. Strange...
DVDSP isn't that hard to use, but it has a major failing for me: it can only use HD video if a HD dvd is being made. iDVD will automatically recode most any video thrown at it, but here an additional very time consuming step is added, one has to export the video from FCP in a SD format ( I chose DV50), the 16:9 aspect ratio won't survive the export but in DVDSP there's an option to force the video back to 16:9. But it's a huge pain to have to do that extra export.