Are you using Mac OS X 10.4 Tiger? If so, you can create a "burn folder" and drag the AVI file into that folder, then burn it. Just select "New Burn Folder" from the "File" menu in the Finder, give it a name (which will be the name of the CD you create) and drag the AVI in. Then click the "Burn" button in the burn folder's window.
or just insert an empty disc, say you want to open it in finder, and it should appear on your desktop. drag the avifile to the disc and when it has finished copying drag the disc to the trash in the dock that now turns into a burn-symbol (orange/yellow and black cirkle).
that is tricky indeed. a 700mb cd is in reality only about 650-660 mb.
you could archive the movie first and see if it becomes smaller (you arcive a file by rightclicking on it (controlclick if you only got one mouse button) and choose "Archive file", it then compresses a copy of the file in .zip-format).
if it doesnt get enough smaller, then you can either buy som 800 mb cds or see if you can find a third party burn application that doesnt steal 40 mb from the cd. www.macupdate.com