700MB AVI to High Quality VOB/ISO

I downloaded a legal 700mb AVI movie (no copy rights) and well its 700mb so its not the best quality plus its from 1968 and in black and white so I would like to make this as high quality as can fit on a blank dvd5, I know mp3 files cant really be converted from 128kbps to 320kbps and sound better but I am pretty sure video can be with the right stuff I just dont know what I need and time isnt a problem. Any suggestions?

The only way you can enhance/improve on this file, is to use avisynth, and try different filters until you get the results that you want. You won’t really be improving it, but you will be cleaning it up, and may even be able to colorize it if you so choose. There are many many filters for avisynth.

Well I guess the way I want to clean it up is well make it smoother… becuase of its small file side its kinda… blocky at times like when the camera is moving fast or… well I think you understand blocky.