Burning DVD movies
I buttume that since you are talking about 700MB AVI's that they are encoded with DivX. In that case, I personally recommend a program called VSO ConvertXtoDVD. It can fit multiple full movies on one DVD, and it burns and converts very fast, but at high quality. It is very configurable with lots of options including menus and chapters if you so desire. It is shareware, and you can also purchase the full version for $34.99. If you are interested in purchasing the full version, A google search yielded that AfterDawn.com and VSO Software have teamed up to offer a 20% discount off the retail price, simply use the coupon code "afterdawn". I'm sure you could always torrent it too, if you are into that kind of stuff.
VHS to DVD
Well you need some kind of DVD recorder. They will have inputs, often RCA jacks, and...
Never burn SVCD's for a movie, they are useless
You should use DVD-Rs. They hold 4.7GB, and are more easily read than DVD+Rs in most home DVD players. If you really want to go all out for 9GB of storage per disc, you can use DVD-RAM or DVD-DL discs, but these cost about $1.25 each, and are not playable on some players.
Most burners these days burn at least DVD-R, DVD+R, DVD-RW, DVD+RW, DVD-+R,
Hope this helps :)