Nero does the conversion internally...simple as pie actually, which is why I've been using it...I find it such a PITA to have to do the conversion, then creation of VOB files, then burning...Nero7 has made it soooooooo simple...well worth the i.nvestment, just wait until its on super sale for under $50 US...

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So Long and Thanks for All the Files
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My computer came with Sonic DVD Plus, so I use that. Works well. Check if yours came with something

Okay, just a bit more confusion.

I have Nero 7 now. I've used it to burn avi movies to DVD's three times.
One time the video worked in my DVD player and it looked excellent. The other two times, I got an error message on my DVD player saying that this disc might not have a playback option.

I did all three exactly the same way, and they were all avi files.

Now I'm gonna pull my hair out!!