Although DVDs are becoming less prevalent due to the rapid rise in web-delivered HD video, some clients still require them. Plus, the self-contained nature of the structure of a DVD, combined with menus and chapter markers, makes it a convenient medium for delivering certain types of video assets where highest resolution isn't as important as easy navigation and offline playback.
Enter the “diskless” DVD, which has the same structure as a regular DVD, including menus and chapter markers, can be opened by DVD player applications, yet doesn't require a physical piece of optical media. Rather, it's written to a hard drive as a disk image containing the traditional VIDEO_TS and AUDIO_TS folder structure. This disk image can then be shared by posting to ftp sites and services such as DropBox, or if desired, burned to Optical media.
And it's very easy to do in Final Cut Pro X, as Steve demonstrates above.