Oh yes it is ! And you can put 5 movies on 1 dvd-rom. For example, I am currently converting my complete VHS library of aging tapes to DivX. I am using a hardware adapter called Easy DVX (but Plextor also has one) and they produce DivX files (extension .avi - same as the uncompressed). Codec version 5.1.1 is what is most used for the moment.
You burn standard dvd disks in DVD-UDF format, and read them on inexpensive set-top readers (I have just bought a Samsung DV860OH).
The output quality is excellent (no loss compared to the tapes).
You don't have the dvd style menu when reading such a disk, but the player lists the DivX files (with the name you have given them), and you just press Enter on the player's remote control.
I expect Movie Studio to accept (Open and Save) DivX format in its future version.

>(extension .avi - same as the uncompressed).

AVI is just a container file format, the contents are completely different.

Ian G.

If you want a detailed explanation in laymans terms check here
http://www.digitalfaq.com/capture/avivsmpeg.htm

If the audio is variable bitrate you will need to use a program like virtualdub to convert the audio to LCPM, this is a quick process as you are only processing the audio (direct stream copy for the video).

I understand it is preferable to generate the DivX video with an uncompressed LPCM audio track from the start.
However, the audio stream on the file I would like to edit is in MPEG layer 2 LP.
Movie Studio obviously can't read this format.
I have opened the file in VirtualDub 1.6.1, and it won't recognize the audio format either.
Finally, I can play the file (video+audio) with Nero Show Time on the same machine (that means that the decoder is installed)