Take The Simpsons Seasons as example, well thats normally 22 episodes or 4 DVD's, but keep in mind those DVD's are Dual Layered. You would have 1/8th the quality if that when converted into DVD files, so my opinion probably very bad quality. I think 3 episodes would fit on a normal DVD. Unless you want to keep them AVI and just hook the computer up to the TV.
The Simpsons is upto like season 18, episode 16. No way you could fit every episode onto one disc. Or you mean just the first season? If the avi's fit, then they fit. If they don't, then they don't.
Sounds like you are talking about converting back to DVD video, in which case I don't get the reference about being half way there. When re-encoding, you should always start with the best source possible, which would be the DVD's, not some AVI re-encodes.
You probably would start with the best, if you had the best...
I am slowly thinking of getting either a streaming device (apple tv style, but with DivX and XviD) or updating the dvd player so I don't have to mess around with all this converting..