Just convert to MP4 to DVD (MP4 --> DVD) without the extra steps.
MP4-->WMV--> DVD
Beyond that not much you can do.
When you re-code theres always a slight quality loss.
The fewer recodes needed the better.
However, if the Source itself is already a poor copy, you just make it worse. The only way to get better results are with a higher quality source, or even better the original.
YouTube videos are very poor quality to start with, even though they may look OK when small, once stretched out to full screen all the flaws are apparent.
Even the "so-called" HD ones are quite poor, with extrememly low bitrates. far too low to even be considered HD actually.
SD videos are even worse.