ffmpeg has a -target option as a set-and-forget means to create DVDs, VCDs, etc. Basically, you can just use this if you need a PAL standard DVD:
ffmpeg -i input.wmv -target pal-dvd output.vob
Or use ntsc-dvd for NTSC. The -target option ensures that all criteria for compliance are met.
Now, you're losing quality during conversion. The problem is… this is absolutely expected. Depending on the original quality of the WMV file (its frame size, frame rate, compression, …) and the type of content you're encoding, a certain amount of generation loss is guaranteed.
Unless you have a better version of the original, the only choice you have is setting the bitrate manually. By default, ffmpeg uses 6,000 kBit/s (that's kilobits, not kibibits, AFAICT) for the MPEG-2 video stream that the DVD needs (-b:v 6000000). It also sets -maxrate 9000000 and -bufsize 1835008. If you want better video quality, you can increase the bitrate.
You must, however, guarantee that the file size doesn't become too large to fit the DVD. You can calculate this yourself, of course, taking into account the video length. You also need to factor in the audio stream with a bitrate of 448000, and a bit of container overhead (the percentage of which I don't know by heart, but it should be negligible).
Don't forget that you can always stop an encoding process by pressing Q. You can then inspect the file visually without wasting precious time on encoding a movie you don't like, quality-wise.