I'm not sure if that's entirely true. You can have it converted, it just may look like crap.
In order to do this process, you need to get software designed specifically for it. You'll need software to take the video files, convert them to MPEG2 and the proper screen resolution, and create the Video_TS file. You may also, in certain applications, have the option to create your own menu. If not, you'll just pop the disc in, and it will play.
You may want to research individual programs to find one that suits your needs before getting one, so you can see what features it is you need.
Hope this helps, sc7.