First, I am no guru with this stuff (and it shows) so I just ask a lot of questions and stumble around until I find something that works for me.

All ,avi files are NOT Created Equal
I had an old .avi large file that I downloaded a few years ago during my Kaaza file sharing days that played the sound okay but had some obscure codec or somthing that would not show the video and only gave a gray or green screen no matter what editing or viewing program I tried to use and I just archived it til a few days ago.

Finally found a safe and free transcoding program called MediaCoder (do a Google) and in one step it transcoded this unviewable 500meg .avi file to a good 3.8gig mpeg2 file that opened right up in DVDitPE to become a neat dvd with chapter menu.

DVD Labels
Glad you have a direct to disc printer. I learned years ago the hard way that you simply cannot use glue on labels for dvds like you can get away with for audio CDs. Glue down paper labels interfere with the dvd player's ability to play the disc so you need either lightscribe (personal thing - I don't like it) or discs that, with a printer like the Epson, you can print directly to the disc. IMO - some of the dvd labels I have created are much nicer than the one's done by the movie manufacturers.

Editing Software
Yeah, I have a soft place in my heart for ULead - the free version I used wasn't a trial version - it came bundled "free" with a dvd drive I purchased - version 6 plus I weedled a nice patch from tech support and that band concert looks great with all six camera versions perfectly synched to the soundtrack.

Anyhow for under $100US version 11 is probably okay though I have only used versions 6, 9 and 10 Plus. While I have tried Adobe Premiere and Vegas they are just too user complicated - IMO - so unless you need capability to open like 100 video tracks and/or 100 audio tracks for your production or a lot of powerful image processing you don't need to spend like $400 to $1000 for software to do good, clean and powerful appearing video post production or that is my personal and hands on experience. I think there are actually two or three cuts out there on YouTube if you do a search for mouse and the boys (name of the band) you can see the job I did - it's primitive but, hey, I had to teach myself how to do it from scratch!

I'm sure the consumer flavors of programs by Pinnacle or Adobe are as good but my success came from stumbling upon the ULead application.

I suggest you try the free transcoder - MediaCoder. Kim Kommondo the "Digital Goddess" even recommends it on her wonderful website.
Regards and sorry to rattle on so.
Jim