Cute animation, and your friend did a good job with the song. Nothing to advanced when it comes to complex animating (not that it was needed), but everything was fluid and neat. The problem is that it's was aimed towards kids obviously, it isn't my kinda style really ;)
Although it's worth for what it is, an animation for children.
I'll only give it a 7 though cause I'm judging from I own personal enjoyment. Really god job though :)
Oh, about the DVD stuff. Adam Phillips wrote something about this in his blog, a program called SWF2video. I hope it's what you were looking for.