Avi is the container. The actual codec used to produce it could be many different things, including divx, xvid, huffyuv, etc. Avi's can usually be burned to disk as data files. If it is divx, many dvd players now support playback of such files (xvid too,).

If you want to convert the avi to dvd there are many, many different programs that can be used. One free one is SUPER---http://www.erightsoft.net/SUPER.html
Another is the old version of VSO DIVXtoDVD found here

But most people use commercial products like the ones from Ulead, Pegasys, VSO and Nero.

Look through the guides over at www.videohelp.com. There must be a few dozen on this subject using the various tools that are available.