Since the original question was to make a DVD, let me suggest ConvertXtoDVD.
It's not free, but maybe an older version can be found on the 'net.
Takes about two hours to make/burn whatever you've got into a DVD (on my dual-Opteron server).
It does re-encode as required.

You might want to edit out the commercials, and for that, not much touches VideoReDo.
However, it's not free.
They have two versions.
One can handle more exotic input formats, and makes DVDs (if you wish).
The other just edits.
You might find recommendations for other tools on their forum.

As for MultiAVCHD, I took a look at it several years ago when it was mentioned on the VideoReDo forum.
At that time, it was of no use to me, and looked very difficult to master.
Of course, with better documentation, anything can be made to work.

I do record HD OTA on a Vista Media Center, edit with VideoReDo, and then write to DVD data discs in the original mpeg2 format.
I have a friend with a Samsung BluRay player which will handle that format just fine.
Sony and some other brands want a proper bluray format disc, and won't play 'em.
I can edit a one hour TV show (8gb) down to 42 minutes minus the commercials, and it fits fine on a single layer DVD platter.
That's still in 1080, and was not re-encoded.

Three hours of video probably won't fit on a DVD without some compromise in quality.
A one hour show (minus commercials) is the maximum without some form of re-encoding.