DVDSanta should convert .avi files to dvd format but you cannot edit chapters into the dvd, when its completed it normaly opens or asks if you want to open your dvd burner
Tmpg2.5 will also convert but i find it a little slow, so i use a program called main concept encoder which will convert most to dvd format mpeg files in around 90 mins, you then need tmpg dvd author to convert to vob files and insert chapters which will take roughly 15 to 20 mins