When you render it, you should be able to create a dvd file (audio and video TS folder, and from there, use dvdshrink if necessary to compress it even smaller. I have used the same software as you, and taken a 6gb avi, rendered it, prepared it to burn (which creates the TS folders), and then used dvdshrink to compress it further to burn to a dvd using dvdcrypter. Everything was hunky dorey...