Created a very large .avi file of a movie (more than two hours long) and tried to burn it onto a dvd using PowerDirector. (In PowerDirector, the option Create Disk allows one to make a DVD playable on any standard DVD player. )
The program assessed the space required and the amount of space available on the blank DVD and warned me that there was insufficient space but at the same time gave me the option to continue with the burn. I selected "Yes" and the program began the conversion and burn but stopped after a while due to space contraints.
Then I noticed that PowerDirector had on the same menu a box that said "Burn to DVD folder". I selected this and the result was a folder with DVD files in .VOB format. The total size of the .vob files were too big for a DVD but using DVD Shrink, I managed to get a DVD playable on my player, without noticable loss of quality.
So for very large AVI files, use PowerDirector to import the large AVI file, burn to a DVD folder and use DVD Shrink to make the DVD.
One might ask, "Why go through all this trouble, when one can burn the AVI files as data on a DVD and play it on a DVD machine?" Well, some, in fact quite a number of DVD players do not play AVI files.