Last night I installed the 341MB System Update 10.5.2 and then Leopard Graphics update (48MB).
The size of the update re-iterates my belief that Leopard release was rushed with Apple cutting corners wherever it could to get it by end of October. 10.5.1 fixed only the most glaring issues - this looks to be much closer to what final version was supposed to be.
The most important issue fixed (for me) is the severe graphics problems that plagued nVidia 8600-based MBPs (like mine 2.2GHz model). As soon as the update finished installing (graphics update has several restarts during installation) I ran iDVD.
Preview of the 7.0 theme (Revolution) based DVD interface, with videos in the background drop-zone, now works without problems and creating the DVD image also worked.
Now I can finally finish my wedding DVD. :)