New Method with Nero Burning ROM 5.5 :

Nero Burning ROM 5.5 now includes a built in AVI to MPEG-1/VCD converter. All you need to do is :

1. Download Nero Burning ROM 5.5 from the official site
2. You'll have to first find out whether your AVI file is PAL or NTSC. Right click on your AVI file, select "properties" and go to the "detailed" section. In the "Video Format" section, it should say something like
   
   576 x 304, 24 Bits, 3460 Frames, 23.976 Frames/Sec, 127 KB/Sec, MPG4 V3
   
   the "23.976 Frames/Sec" is the frames per second property of your AVI file. 23.976 == NTSC Film ; 25 == PAL ; 29.97 == NTSC.
3. Put a new blank CD-R in your CD-writer drive
4. Start Nero Burning ROM 5.5 and start a new "VideoCD" compilation. Now you'll need to choose PAL or NTSC mode, depending on your existing AVI file. Press the "New" button to start the new compilation.
   
   
   
5. A new window should open, and you should drag in your AVI file into the following window :
   
   
   
6. Once you have finished dragging in your videos (you can drag in about 70 minutes of video per 650 MB CD), from the "File" menu, select "Write CD". Feel free to change some of the CD writing options (such as Lable, writing speed ...), and click on the "Write" button when you are finished.

More info can be found at VCDHELP.COM