Is there a MemoriesonTV kind of software that allows to burn still images onto CD's/DVD's? I'd assume that this software would have to create MPEG2 files from full resolution still images and later burn onto DVD to be able to view on an HDTV screen in 16X9 aspect ration.

Yes you can have picture or slideshows on DVD. What happens,
however, is that these pictures are indeed encoded to MPEG-2
movies. These movies need to follow the DVD standard and
therefore can only be in SD resolution (720x480 or 720x576).

There is no way to get high resolution stills on a DVD and get it
to play on most DVD players. However, some DVD players these
days can display JPEG photos of a CD (probably of a DATA DVD
as well), and if they support HD upscaling it might display them
at a higher resolution. However, this is far from standard!

So basically what you want is not possible..... yet