I don't have a DVD to test with but I did a few tests on a 2 minute clip from The Thing, 1280x540 @ 24fps. Using the AppleTV preset available in the Turbo.264 app the render time was 2:57 and it gave me an 1136x480 file @ 1453kbps. Using the Quicktime AppleTV preset render time was 8:00 and it gave me a 1280x540 file @ 2686kbps. The next test I did was to do a custom setting export to ensure the resolution was retained, audio was passed through and a matching bit rate of 1024kbps was used. The Turbo.264 app rendered in 3:20. Quicktime rendered in 8:30, which was surprising given the render time from the previous test. I think I had forgotten how slow Quicktime was at exporting h.264 files.
You can convert any source video you want with the Turbo.264, regardless of it's resolution. The Turbo.264 is capped at the resolution it can export though. It actually won't let you enter values greater than 540x800 in the resolution box when making a custom setting. It does however retain the full width if you have a clip that exceeds the 800px width limit (such as the 1280x540 file I was using).