You do know you can watch the DVD on your computer without having to burn a disc or converting it to an AVI? Download the trial version of PowerDVD and you'll be able to view the DVD straight from your PC. You can d/l PowerDVD from : http://www.cyberlink.com/multi/products/main_1_ENU.html

If you really want to convert the VOB files to an AVI then AutoGK is a simple and straighforward program you can use. A step by step tutorial can be found here: http://www.doom9.org/index.html?/autogk.htm (Skip Step 1 as you already have the DVD on your hard drive)

You really should fork out and get a DVD drive. You could probably ditch your CD burner as well because DVD burners also burn CDs...