My Toshiba DR-400 does not create any Audio_TS folders but the DVDs play fine with Audio with a Home Theater Receiver or on PC.

Is this normal or am I missing something here?

Thanks

Completely normal. The audio folder has not been used since the very early days of DVD. It's required for compliance with some very early players, but not with any recent players.

In the VIDEO_TS folder, the .VOB files contain both the video and audio streams.