I just think it's a real bad idea - most everyone I know watches a movie from beginning to end - or from where they left off with their own viewing of the content on the same service (Netflix resume, Amazon Resume, whichever) - Chapter jumping to favorite selected scenes isn't a big priority in my experience. For particularly popular content like the cut scenes in Ice Age, they just cut out those sections and run them as a single separate file.
For TV Shows, there are 2 or 3 chapter points - but even then it's the same thing - 'most' people will watch the episode from beginning to end instead of starting watching at chapter 2. If you don't want the beginning credits, or end credits, or the 'previously on' then just crop that out before encoding.
As for what screen to use if I wanted to do this with DVDs I actually own the rights to redistribute (home movies perhaps?) - I don't think I'd set up chapters for those either - I'd have my home wedding video, my birthday video, etc all on a gridscreen as single play content items, and I'd have master MP4 files already encoded from source raw camera recordings - I wouldn't be reducing quality by even putting it on DVD to begin with - maybe BluRay.
