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Nero is very good at burning disks, not much use for anything else, but good at authoring. :) Before you add anything to Nero, you need to make sure the source is error free, add an AVI with junk frames and you can expect Nero to either crash, or cause bad lip sync.
Assuming your source is an error free AVI, or an Mpeg 2 for DVD you can use this guide to make a VCD or DVD with just Nero, if there are any problems with the source, you need to go fix them first.
Start Nero's "Start Smart"
From its menu select Photo and Video > Make Video CD (For VCD) or select DVD if your making a DVD
From The right hand list select the media file you
wish to add
Continue to add your media files, or if its just
one, add it then click Next
On the next screen you can add background pictures, Change the layout, change the buttons and add text, when your happy with the settings click Next.
From the screen you can test out the VCD before
you burn it, if you have added menu's you can also check they are all working
before you burn the disk.
When your happy, click Next
The final screen will ask you where you wish to burn the VCD/DVD too, from the right hand menu select Burn To > Your CDR Writer.
Before any media file is added to the disk, Nero has to encode it. Depending on the speed of your machine, and the size of the movie, this can take several hours.