You sir, are overcomplicating things for the newbie here. I also think you may have a few(lots of) misunderstandings yourself, but I'm no one to correct you since you have such an extensive knowledge of everything video.
To the OP (that is, original poster, orbdrums):
You first need to understand that a "movie" DVD is different from a "data" DVD. I mean, you can burn any kind of data to a DVD if your computer have a DVD burner, but a home dvd player will only read DVD discs that have just MPEG2 files (those are the ones that come with .bup, .ifo, .vob endings inside a VIDEO_TS folder when you insert a commercial DVD on your computer). Unless you understand this, you will make an error many people (including my aunt) makes, e.g., trying to watch a powerpoint presentation (or an avi movie, it's the same) they burned to a DVD disc in their home DVD player.
Now, you need to ask yourself what you really intend to do: "Create a DVD" could be different things to different people. E.g., create a photo slideshow to watch on your home DVD player, copy a commercial DVD movie to backup and watch if the original disk ever gets lost or destroyed, or to create your very own masterpiece of a movie and burn it to a movie DVD.
From your original post I understand you want to copy movie DVDs and burn those copies. But then, in a latter post, you also state that you may use the "avi files" for some other purposes. I will try to address this in separate:
First case scenario: you want to replicate some movie DVDs (please note that if the DVD's you are trying to duplicate are "data" DVDs, this is as simple as doing it in the finder, drag from the original, eject, insert a blank DVD, drag the copied files to the new DVD and burn).
- Insert the original DVD to your computer
- If the original DVD is not copyrighted and it "weights" less than 4.7 GB (or less than 8.5GB in case you have a double layer DVD burner), open disk utility, go to "File", "New", "Disk image from YOUR_DVD", and choose "DVD/CD master" as the image format, with NO encryption. You can subsequently burn as many copies of this image as you like
- If the movie is copyrigthed, you'll need MacTheRipper to remove the CR first, then, if it fits on a single DVD, repeat the process of the previous point
- If the movie does not fit in a single DVD, you'll need to compress it, unfortunately, there is no free way to do this that I'm aware of. I use DVD2OneX2 for this purpose
Second case scenario: you need to use clips of the movies for different purposes (putting them in your iPod, make them part of a presentation, edit them in any way, etcétera). In this case, you do not need to burn a movie DVD at the end, rather, you need to "work" with the files you'll get
- I recommend using HandBreak, in this app, you may choose from different formats (mp4, avi, ogg, mkv, etc.) and different quality settings (that result in different file sizes)
- If the movie is copyrighted, you'll need MTR first, then HandBrake
Please bear in mind that you
do not need to convert a DVD first to another format if what you want is to burn a movie DVD, if you do so, you'll lose quality every time. If you want to burn "movie DVDs", stick with the MPEG2 format, do not convert them to mp4, avi nor any other format; instead, just remove the copyright, make an image and burn (either with DiskUtility or with DVD2OneX2).
If you've read carefully, I have not mentioned iDVD nor iMovie, not even once. This is because those apps are intended to Create content, not to Copy movies, and therefore, they do not relate to what I understand you are trying to do.