Split it in half (or more) dont even f*** around with deconding/compression, there's to much crap to worry about and you'll totally destroy the quality . That Avi Spit cal works great, all it takes is a couple of clicks.
I use VD all the time and its great, the CD's aren't DVD quality, but there better then a VCR tape.
One you split it all you need is a burning program with a MPEG2 decoding plug in... and bam you got yourself a CD that will pay in any DVD player.