I have long video clips 30 minutes to an hour and I would like to install breaks of some sort for easy reference. Is this possible, to get chapters or something like chapters ?
You can use a variety of video editing programs I.E.(Sony Vegas, Pinnacle 14, etc) that you could import your AVI files and render them with chapters. Keep in mind that when you render these files with chapters you lose some of the original quality.
I recorded in 640x480 at 15 fps and quality is good. How will quality be affected and is it quite noticeable?
Some programs will accept a chapter list. In the case of an AVI file, before converting it to DVD format, you load it into the likes of AviDemux or VirtualDub and scroll through, making a note of the frame numbers where you want the chapters. Save the numbers in a .txt file using Notepad and import the list into the conversion program instead. This is especially useful using Freeware where the cost or learning curve for upscale commercial software is not justified. The likes of AvstoDVD is a good example of freeware that can accept an external list.
ConvertXtoDVD will let you have chapters and will convert it to DVD, but you probably won't be able to cut it precisely where you want. For example, you can have it make chapters every 5-10 minutes if you want.