BD Rebuilder will compress blu ray movies to fit 25gb blu ray disks, or compress to fit single or double layer dvds. The output is blu ray video, not dvd video, so you will need to play these on a blu ray player or on a computer.
Unless you change the default settings, output to single or double layer dvd will be AVCHD compliant.
BD Rebuilder does not include a decryption function, so if you are working with commercially made blu ray disks, you will need to decrypt and rip the movies to the hard drive first using AnyDVD HD or DVDFab.