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Most .avi movies are DivX/Xvid. Install those, along with AAC and AC3 for sound and you should have all you need in that section. Or grab a pack like CCCP which installs all the codecs and settings you'll need (not dumb like the Kazaa pack and will NOT mess up your computer like others).
Use TMPGEnc Xpress to convert, and TMPGEnc Author to burn with menus and titles and whatever you want. Or use Nero to just get the movie.
With TMPGEnc you can select how much you want to fit on a single DVD-R and it compresses the quality fairly well to meet those needs.
Takes a while for conversion though. Byuing a 60$ CAN DVD player is a lot easier.
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