How about taking an AVI file, using TMPGEnc to convert it to an MPEG (which you can use Nero to make and burn an SVCD) maybe then TMPGEnc DVD Author to make a .VOB (put that in a VIDEO_TS folder) and then use Nero to burn to DVD ??
If you're talking about 4.3GB ISO files, they're DVDs, their quality is same as with original DVD or very close to it and you burn them just like you would burn a CD image. You can burn them with various apps, I personally prefer either DVD Decrypter(go to Mode menu, select ISO and Write and then select the ISO image you have and burn it) or Nero(go to File menu, select Burn image and select the ISO you wish to burn and burn it).
For converting AVIs (DivX, XviD, etc -- compression format doesn't really matter), read our guide for converting them to DVDs from here:
