Their website says: "non-copy-protected DVD-Video titles only"
http://ww2.nero.com/nero6/us/Nero_Recode_2.html
But im seeing tons of mpeg4 movie files (new dvd releases) online, created by Nero Recode. So this is either untrue or theres a way around it. I personally haven't tried burning a dvd yet. Nero is pretty strict with protected software titles though...