lol it sucks either way. most divx /avi sourced on the net are already over compressed...and sub dvd resolution to boot. they are compressed to fit a cd or two. why? because pirates follow arbitrary laws lol. it is teh law yo!! must fit on a cd or its nuked! even when you recompress dvds using h264 if you want to preserve quality you need ~1.6-2.5GB for decent quality at full animorphic resolution ,and thats much better compression codec. so avi releases just are sh*t to begin with and theres no way around it. and they got away with it because well, it was meant to be watched on a computer screen, and was started way before flatpanels got popular and cheap. dvd resolution is already 6 times less than 1080p to begin with.. watching an avi on a hdtv is ugh...waste of effort.
now feed that through an avi to dvd converter and you lose even more quality because of recompression.
better quality? f*** no!
you don't get more quality converting from one lossy format to another, qualitys already been lost. and only gets lost further. furthermore the audio will just get recompressed again unless you are lucky enough to have an ac3 audio track, which is very unlikely.