Alright, let me tell you what you need to do. First, get a program like TMPGEnc or another program that allows you to convert from avi to mpeg2 format. That's what you need to do to be able to play your video files on a standalone dvd player.
Now the reason your files are so large when you are trying to convert them is because the one you are trying to burn is compressed, heavily. When you go to burn it, it's decompressing it so you can watch it on your dvd player. decompressed movies take up a lot more space.
When you are going through the options to convert your files to mpeg2, most programs have options to compress the output. Tweak these options to better fit your movies onto disc.
Remember, the more compression you use, the worse the quality of the output. You can also change the resolution of the movie to a smaller size to make the file size even smaller.
There are many good guides at these sites:
http://www.afterdawn.com
http://www.doom9.org
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