The DVD burner is a piece of hardware - it will burn your image file to a DVD. The software you get with your DVD burner (often Nero) will allow you (maybe) to make some adjustments as to how that is achieved. Mostly DVD burning software just allows for speed and format changes (PAL or NSTC). If you want to have more control of the image quality etc you need to get a dedicated video editing suite not just Windows Moviemaker which you will have on your comp - it doesn't have a burn to DVD function.
Having said all that, yes a DVD burner will allow you (with its accompanying software) to burn your WMV file to DVD - you will find, however, that your DVD image is a bit pixellated or blurry looking - DVD standard size is 720x480 (NTSC, PAL is 720x576) so it will be resizing your 320x240 image to suit.
WMV btw is one of the poorer image quality file types.
If you are going to attempt to convert your old VCR movies to DVD you will need to get an analogue (the way your VCR records video and audio) to digital converter. There are a number of threads on this site dealing with analogue to digital conversion methods and hardware and software options - just do a search for threads.
