I have the same program and the same problem.
i've never used Intervideo win dvd creator, but it sounds like an aspect ratio problem. i have used just about every other method of avi to dvd conversion and suggest you give nero visionexpress a try...as always BE SURE to go to more options and do A LOT of righclicking everywhere possible in order to bring up more advanced settings etc.
Will Nero 6.6 do an AVI to DVD conversion without using TPMGEnc to encode it. If so, what are the required settings. A link to any guide would also be helpful.