Well I don't know too much on how the specifics work. I know that the usual dvd is in MPEG-2 format so that is the most acceptable form. But the big question is how i get my .avi or other format to a form that you can burn on a dvd. To be able to do this you will need a program that converts it for you. The ones that you can download online will most likely (for me so far all cases) make a watermark (slightly transparent logo) onto the file that you are converting. So if you want to legitimately be able to convert these movies you will have to buy, a preferably, well known dvd converter (Nero, ConvertXtoDVD, etc). Also fall back to torrenting, it is illegal to torrent things that are marketed with copyrights and anyone caught by these huge companies, that are distributing hundred or thousands of the same product daily and dealing more with employees then individuals using a hard to track way to steal their product, you will be fined and or jailed for it. Torrents can transfer almost any program, movie, or game so make sure you only torrent when you are allowed to (cough). Look back to previous post for more info on torrenting.
Feel free to ask more questions and I will get to them and answer them to the best of my abilities.