I have recorded from video cassette to my computer. Two movies created in Movie Maker. 1st 30mins. 2nd about 80mins. Saved to computer as separate DV-AVI files so I can play back on TV after burning to DVD's. Thought I could burn each to blank DVD as they are 700mb (80mins). However, when saved to computer, the files become huge - far too big to fit on DVD's. Would need possibly 20 DVD's. How can I get round this? Is there another format to save to computer or is it possible to reduce the file size before burning? Thank you.

Check out ULead MovieMaker instead. Microsoft MovieMaker saves the video out to a Windows Media file type that is really large. I kind of like the MS MovieMaker that comes with Vista but the files are way too big.

I would also be interested in other options on this as well.

DV-AVI is the way to go when you are saving the movies prior to editing. This gives the best resolution. It bit of an overkill trying to import VHS movies in DV-AVI.
Now once you are done editing this movies, you cannot copy them as it is on a DVD disk and expect them to play on a DVD player. You have to "author" a DVD disc and the movie gets converted to MPEG2 for a DVD movie which is much smaller than avi. You can also convert it to a VCD which utilises MPEG1 compression - even smaller that MPEG2. Considering they are VHS tapes you need not go for a very high resolution.
Again you managed to capture the VHS tapes to your computer. So you already have a video capture & editing software. That software itself will do it for you. Can tell me how you captured the video on the computer.

NB: A blank DVD is 4.6 GB and a dual layer close to 9 GB. Not 700MB. You are talking about a blank CD.