AVI format is raw format (i.e., uncompressed). DVD movies use MPEG-2 compression in order to play on DVD players.
Commercial DVD films use larger DVD's - dual layer in order to fit more on (you may notice a small pause/jump about mid way through a film.
If you do use a video editing package, there should be some sort of export to DVD option which will then convert your footage from AVI to MPEG-2 (which will take a while).
I hope this helps.