How do I watch movies in avi format on a DVD player?

its impossible to say the only one 100% compatible with every dvd player is VOB, different dvd players support different video types

Severals player can play avi with mpeg4 codecs. Some of them can play only DVD.

For conversion you can use axara video converter. It can convert video to any formats and burn video to disc

there is an easy way, you can try RZ DVD Creator, i have used it, it can create standard video DVD, it can directly convert and burn any videos to DVD(DVD+R, DVD-R, DVD-RW, DVD+RW, DVD-DL, DVD+DL, etc), such as avi to DVD, etc.

Work well on my computer, i like it, and i believe that once you try it, you will like it too.

Following is a step by step guide:

http://www.rzfun.com/convert-avi-to-dvd.html

Hope it can help you.