The reason I'm asking is because it seems that "some" movies even though they are coming out very good quality tend to be too dark on my PS3. The picture is quite crisp and clear after converting but clothes, shadows, etc tend to be too dark. Almost like you would need to adjust the brightness setting. Now I don't know if the conversion process is even the culprit causing the darkness.
You cannot "gain" quality by not converting, you just don't lose the quality, you preserve it. So, you're converting the AVI files to DVD to play on your PS3? Why? The PS3 is able to play Avi(Divx/Xvid) video without any conversion, just copy it to an USB stick or a disc.