Hi and welcome to the forum
The quality of encoding is related to two basic factors: the quality of source video, and quality of the mpeg encoder.
For what I know convertxtodvd uses a good encoder, but to find the best one you must try some by yourself and check results in your television with your eyes. Some people seems able to spot even very subtle artifacts, whereas other people are not able to notice any difference compared to the original.
However, converting an avi to DVD is causing a quality loss so the best option is to get a standalone player able to read also avi files. In these days is not difficult to find, and prices are not really too high
I'll move this thread in the proper forum (this question is not related to a burning software :))
ooops... olyteddy was faster