For the definitive conversion program use TMPGEnc,("The Mpeg Encoder") stupid name, great program..... you can convert pretty much anything to mpeg with that...
to burn to a vcd, the easiest program to use is vcdeasy !
for everything you wanted to know about conversions, links to freeware/shareware downloads and burning, guides etc go to this excellent site....
dvdr help.com site (
http://www.dvdrhelp.com)
also, most xp systems now come with "Windows Movie Maker', that'll do a 'rough guts' avi/mpg conversion for you too
MTFBWYA