After running FSEventer to watch where Encore wants to write, I find it trying to log the Video TS Layout inside it's own .app bundle!
When the user has full permissions to write, Encore creates this file: /Applications/Adobe Encore CS5/Adobe Encore CS5.app/Contents/MacOS/DualLayerVideoTSLayout.log
When a user does not have write permissions, Encore complains. There are a couple options to fix this;
1) Give the world write privileges
chmod o+w DualLayerVideoTSLayout.log
2) Change the group to your standard users group
chgrp staff DualLayerVideoTSLayout.log
or my favorite...
3) Symlink the log file to tmp
ln -fhs /tmp/DualLayerVideoTSLayout.log /Applications/Adobe Encore CS5/Adobe Encore CS5.app/Contents/MacOS/DualLayerVideoTSLayout.log
So if you ever run into Adobe Encore CS5 failing to burn, check this log out!