Because it converts it to the normal dvd video format.
2) is there any software that puts avi straight onto disc or does it always have to be converted to vob?
Well, any dvd data writing program can write any file (so even .avi) to a dvd disc. I like InFraRecorder. You don't have to convert it into vob if you're not planning to play it on a (standalone) player that can only handle vob.
3) how much data can i fit onto a dvd (4.7gb)
for it to still be great quality, because i read on a forum one person had 19gb and it was perfect?
The data is the data is the filesize.
What you are trying to accomplish is to recode/transcode/modify the video format into another video format. That's an entirely different thing.
Don't do anything, because i think ConvertXTODvd automatically sets the quality/ratio. You could enable 2-pass encoding for better results, but it takes longer.
4)can i burn one film (699mb) onto a 700mb cdr and what software do i use.
Writing software like InFraRecorder.
P.s I play on an xbox 360
The Xbox 360 can handle xvid and divx quite well these days. Just burn your .avi on a cd, pop it in the xbox and go to My Video. Use a rewritable disc if you're not sure if the .avi is a divx/xvid file.