Everything you need is already included with your Mac, FOR FREE, except Handbrake, which is a free download (and free to use, not baitware) from here:
HandBrake
Use Handbrake to convert the AVI to something usable by iMovie, use iMovie to edit the video(s) and add text, audio, and photos, and then burn that, complete with animated menus, using iDVD.
Any Mac user who actually BUYS software to do these things for casual use is spending money on inferior crap, and a complete moron falling for crapware peddled by spammers on internet forums.