check out www.vcdhelp.com

Download TMPGEnc

It has a built-in Wizard that takes you step by step through converting AVI to VCD-ready MPEG's.

I'm using it to create a collection of La Femme Nikita VCD's (all 96 of 'me ) I use VirtualDub to capture and edit the video, then TMPGENC - which includes a handy batch mode - to convert them while I'm gone to work. Most CD authoring programs will include an option to create a VCD, but you might have to hunt for it. For example, in Prassi Primo CD / Sony CD Extreme, you have to click "go to full application" to get the VCD option.

Hope that helps