I've had .avi conversions come out at very variable sizes, but not normaly only 100Mb more than source. If you wanted to put a load of such conversions on one dvd though, you would need an authoring program such as DVDLab (the utter nuts, love it).
For conversion I would go with the above poster and recommend WinAVI 7.6. Set to medium quality and speed settings you should be able to get two, maybe three depending on original bitrate, movies on a dvd (author with DVDLab) no problem. If you want higher quality, just change the settings, as the higher and quality mode is utterly superb as long as you have a decent file to work with in the first place.