Yeah, you can't put DVDs straightly to CD, since the former is a 4.7 GB disk (or 9.4 GB if double layered) and the latter is some 700 MB. MPEG-2 is know to suffer greatly from low bit rates, moreover. However, if you compress a movie by using XVID or other MPEG-4 based codecs, you could be able to get a short movie on a CD.
But I don't get it why anybody would want to put a movie on a CD. We've got writable DVD discs and external hard drives that have got so much more space.