You mean video DVD, don't you?
MRoogle will bring you lots of threads about this issue, as there a lots of ways and lots of applications to help you.
It also depends on the source .avi file, which codec it uses, what resolution it has and so on.
Also you have to consider, that video DVDs are to be done either in the NTSC or PAL broadcast format, if you talk about standard definition (SD) television.