It doesn’t matter if its payware or freeware. I just want a software that could do EXACTLY this:
1. Be able to read a dvd as an iso file, mounted, or if it’s in the cd tray.
2. Convert to a single avi file and I have the ability to control the size of the file (for example 700 mb)

Had a lot of problems with Xilisoft on sound synch, size and quality. Moved to DVDFab and am very happy with that...

DVD burner for Mac provides an easy and fast way to convert popular video formats (including AVI, MPEG, WMV, DivX, XviD, MP4, DV, VOB, ASF, 3GP, NUT, YUV, H.264/AVC, M4V files to DVD. The DVD Burner Mac could also burn DVD movie onto DVD disk that playable on portable or home DVD player and burn DVD folder or ISO files. No other Mac DVD burner can provide so many formats.
AVI to DVD for Mac, a profeesional but easy-to-use DVD burn software for Mac users, can convert AVI to DVD format on Mac OS X perfectly and quickly. The AVI to DVD Mac not only supports converting AVI to DVD Mac but also supports other popular formats to DVD on Mac, such as MPA, ASF, DIF, H261, YUV, NUT and so on.
DivX to DVD Converter for Maccan not only convert DivX to DVD Mac, but also support convert AVI to DVD, 3GP to DVD, MP4 to DVD, FLV to DVD, MPEG to DVD, WMV to DVD, etc.