i have a similar problem, although i have two large avi files in the region of 700mb and i want to merge them then burn them to a dvd-r disc with 4.7 gb data capacity.
I've tried split fuse to merge, but the sound becomes distorted. Also tried compressing them using divx converter but when thats done and i put the compressed files back into idvd it's still telling me the total size of the files are 4.4 gb with only 4.2 gb available.
Anybody got an ideas?