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For any burned DVD to work in a DVD player you need to create an image file (.iso) out of the source file (in your case, .avi). I use DeeVeeDee on Linux for this. It would also allow you to create a DVD menu and will compile it and the movie into the iso. Then you simply burn the image file onto a DVD. The only way to get another type of file to play is if that particular player supports the codec such as many current DVD players will read music CDs, image files and sometimes mp3 files.
I had to figure this stuff out as my band's singer would send me our shows that we had recorded with his HD camera. I had to use DeeVeeDee to convert his mpg files and the band image and menu options into an iso file.
Although on XBox360 you may get away with a DVD where the file burned to it is in a windows format since 360 is loaded with Windows Medial Player. But I haven't tested it myself to say with any certainty. And of course, that wouldn't work for a standard DVD player anyway.
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