Yeah the bigger festivals we've played at require the better deliverables, and the small festivals do fine with a dvd copy. Once you sign a distribution deal, you will be providing them with these different formats anyways.
I will say this, and I'm surprised nobody has brought this up. Often times, if you want a festival to screen your film, if you have the option... Send them an online screener from a password protected account. This goes with people who want to review your film.
At the early stages in the game, I would send out a DVD to big names in Hollywood or people with influence, if they were interested in my film. But I've learned it's very risky, unless it's a large distribution company or a big film festival.
We've been luck to not have our film pirated, but I know for example, after we played at the Slamdance Film Festival, the projectionist gave the copy to a friend, who passed it to a friend, and one of those friends hit me up, telling me how much they loved the movie, and where it came from. This is how movies hit the pirate circuit before it's been released, killing a % of your initial sales. Be careful.
We make sure and insist that they send us the copy back, after they've screened it now. We are super paranoid, and you should be if you've invested the time and money into your baby, and you feel it's got a chance in the market.