1) Would SVCD be better than VCD? VCD is mpeg, an old format, thats a low quality image, SVCD is mpeg 2, a higher quality format, same as dvd, but at a very specific bit rate.
2) Under "Default Video Options" at the start, would "Aspect ratio" be better if instead of Automatic I used 4:3 or 16:9? You should leave this as automatic, so nero can read the avi file and convert properly, if you belive that nero is incorrectly doing 4:3 instead of 16:9, then change for that particular avi file you are using. Dont change a 4:3 into a 16:9, as the resulting dvd will look odd.
3) Trying flix now that doesn't fit with either "High Quality" or "Standard". Should "Long Play" not even be an option if I want the pic to look good?
These options are defaults to use instead of "custom", so you dont have to set your own encoding rate. A "2-pass" will give higher quality.
Ignore Nero Recode, its only for amending dvd disks, and not for creating them from avi.
Here's what to do:
NVE3 and choose "Make DVD..." and then choose "DVD-Video". Now "add video files" and select your avi file. Look to where the blue "used space" bar is sitting, you can go all the way to the red dotted line at the end. As an example i have a avi file at 1hr 23mins, this is only 3gig on the size scale, i use the "more" button and then "video options" then the "dvd-video" tab. On the "quality setting" i change this from "automatic" to custom and increase this to 7000kbits/s which puts the blue line at about 4.2gig. This will give a better image quality, as the higher the kbits/s rate, the better the resulting dvd is.