This version of InterVideo WinDVD does not have support for AAC files. If you need support for AAC, you need to upgrade to version 8 as special features were introduced.
"Supported audio formats/codecs: WAV, MP3, AAC, LPCM, MLP Lossless, Dolby Digital (5.1) and Dolby Digital (2.0), Dolby Digital EX, DTS 2.0 and 5.1, DTS Neo:6, DTS 96/24, DTS-ES Discrete, RealMedia/RealAudio" - WinDVD Supported File format, Wikipedia.