This info from MS seems to imply a WMV HD DVD can do chapter points.
A Windows Media® High Definition Video (WMV HD) DVD provides a DVD-like menu experience on a computer. A WMV HD DVD features DVD-style interactive menus with buttons that let viewers select various options such as audio track and subtitles, chapter selections, and special feature trailers. This is accomplished on a computer by designing a series of HTML menu pages that expose clickable buttons powered by Microsoft® JScript®.
http://www.microsoft.com/windows/win...d/default.aspx
Dave