I believe that Wine Quartz (the library that takes care of video encoding/decoding) is still in heavy development. Since I can't help you further with your current problem, might I suggest you use avidemux in combination with one of those DVD encoding programs that don't seem to work with your source material? I find that you can heavily edit and re-encode the file in DVD format (lavc, mpeg2enc) and then just "throughput" the correct file in the DVD file maker. It's kind of a hackjob of a solution but it's a solution that works until you can get Avi2Dvd working. :)
