Broad stroke here

CBR allocates the same rate across all frames, VBR allocates more bits to the frames where they need them and less where they do not. 2 Pass puts the bits where they are needed also in the areas of the frame.

Example - Picture a Red Circle on a Black background, not moving, for 20 seconds of a clip. Then the next 20 seconds is a tree blowing in the wind in front of a wall (Yeah kind of strange movie, isn't it?)

CBR (lets say setting of 5) would allocate 5 to every frame, the Circle and the trees, which really does not make alot of sense since the Circle is not moving and stays the same across all 20 seconds and the trees are moving.

If the Circle for the most part would look the same at 3, using VBR will take more bits from the Circle and allocate it to the tree section. (Remember the Compressor in VBR is looking for an average target rate.)

1 Pass VBR will take the bits not needed for the Circle and move them to the tree clip, spread evenly acrosss the frame. Which again has an issue - the wall is not moving, the trunk of the tree is not moving. Two Pass will take more of the bits away from the stationary part of the frame (the wall and trunk) and move more of them to where the leaves are moving.

Anyway also note that there is a cap on how much data is DVD Spec, audio and video is 10.08 Mbps (9.8 for video), I usually budget for less though, sometimes higher rates on burned DVD-Rs can cause stuttering//glitching, and also discs full to the brim also have issues on some players. I usually aim for the least rate that looks the best.