If I was going to do this I would start by using VOB2MPG to convert the contents of the VIDEO_TS folders to .mpg files. Load the .mpg files into DVD Flick. Add the single .VOB files then the .AVI files. Note, you can rearrange the order as you please. Under 'Project Settings' > 'Video' > 'Advanced', check 'Copy MPEG-2 Streams'. This ensures that the files which are DVD compliant (that is they do not need conversion from PAL/NTSC and are the correct resolution) are not re-encoded. All this supposes that the output will fit on the selected disk size. The size of the avi files will balloon when converted to DVD format - in these cases it's the running time of the source that matters - not the source file size. If you get a warning that the output will not fit the selected disk, you can omit a file or select a DL disk as the target. Instead of burning the disk immediately, you can save it to a folder and open it in DVD Shrink and have it transcode the files to fit a standard disk.
That's ok if you wish to keep everything as AVI - although I would use a quality app like Auto GK for converting the VOB files and VIDEO_TS folders - the bad part is that if you want everything to end up as DVD format, any VOB that you converted to AVI has to go back through another encoding to get there, with the inevitable quality hit. The method I outlined only has the AVI files being converted/encoded - the VOB (and .mpg files) are DVD compliant (and as long as they are not changing from NTSC/PAL PAL/NTSC) and take no hit.
Not familiar with that program;there's a forum here. http://www.windowsdvdmaker.com/forums/6/ShowForum.aspx
