DivX not an option
...... if you want to play on a standalone DVD player. I think. I am not aware of any DVD players that can play avi and mpeg movie files off a disk.
With VCDs the movie file is a .DAT file and the player will recognise that it is a VCD or a SVCD and will play it (if your standalone DVD player can play VCDs and/or SVCDs)
If you want to play the movie on your computer then I would recommend DivX from what I've seen. VCD doesn't compare well with DivX from my experience. With DivX it is possible to have an entire film on one disk and still have good quality. Although a DivX movie on 2 CDs is superb quality.