Nobody would have questioned someone giving their VHS casette recording of an episode of "coronation street" before the days of DVDrw. Legal or not. How about sticking to the simple question of what the original poster was asking!
If the dvd writer you are using is ONLY compatible with DVD MINUS (or DASH for the obsessed) which is unlikely unless the writer is quite old, then use a DVD Plus R/RW disc. Otherwise, copy the data from the DVD-RW disc to the hard drive first and using Nero etc burn a DVD data disc (i.e no need to burn a DVD video using Video TS folder as it should work as a straight copy).
I'm sure someone else will explain better. Either way it is nothing to do with the capacity of the discs you are using.