The place to start is to ensure MEP is pointing to a valid folder on your computer.

From within MEP, select "File" - "Program Settings"

In the "Path settings" tab, you should make sure all of the configured folders are correct.

The one you are specifically interested in is the "Disc images:" path.  This is the folder where MEP creates the actual DVD disc images during encoding.  It then burns those images to your DVD.

As an extra note, MEP never automatically deletes these images, which means they will eventually fill up your HDD.  Believe me, I learned this the hard way.  After I'm sure my DVD plays correctly, I always go back and delete those files.

Hopefully, this solves your problem.

Good luck.