Housepig - thanks for the web link. Looks like a good site.
I've been having similar problems. I now have 2 ATI All-In-Wonder cards, which can display TV on your monitor & record video from tuner or outside sources. But I just recently attempted to make my first Video CDs. Both Nero 5.5. and EZCD Platnium 5 have wizards built in to make Video CD creation easy. EZCD wants the file to be in MPEG-1 format; Nero will accept either MPEG-1 or AVI (it converts the AVI).
My first VCD attempts were a half-hour TV show, which takes up about 1/2 or a CD. I believe the default resolution is 352
x 240 (or something like that). I recorded the same CD with each burning program, and got the same results. The CDs play on both my JVC DVD deck and my tenant's Onyo DVD deck (but annoyingly show less distortion on his) and will play no his laptop DVD drive using WinDVD playback software. However the CDs refuse to play back at all on either of my PCs using ATI's own VCD player program, so I don't know what's up with that.
The overall quality of the display is similar to a poor VCR recording in 6 hour mode - pretty grainy. I have also tried recording in MPEG-2 DVD format. This looks MUCH better, although still not as good as my SVHS tape deck. In this mode an hour of video uses up 3.7 gigs of disk space. I don't have a DVD burner yet, so this isn't really an option.
My only suggestion about playback, either on computer or stand-alone, is make sure it's a new drive. The older ones don't seem to do anything except legit DVDs. Typically any drive that advertises it can play MP3 data CDs can also play Video CDs.