best way to make a VCD from an avi

[compactje]

I would like to make a 1CD VCD from an AVI file of +-700mb, is it possible, I would accept to reduce the image quality, but not the sound, in fact it's to play it in my car, so the sreen is very small TFT radio screen) what are the possible solutions, at the moment I use virtualdub to cut the movie and I burn 2 VCD's but it would be much nicer to have only 1VCD for a movie!
greetz