You realise that AVI is a container right?
Your wanting to convert a file that is probably already in MPEG form of some sort into MPEG?
What size are the videos in the first place? Id recommend using SUPER(
http://www.erightsoft.com/SUPER.html) i know it sounds like a kinda dodgy name but it is actually a pretty good program.
Id recommend using H264 for obvious reasons (being MPEG4) much much better results at smaller bitrates (and hence smaller file sizes). Not sure what restrictions youtube place on uploads though
Not that it should matter as the video is converted to a flash file anyways but thats neither here nor there.