question about how i put an .mpg back to an .avi or Divx

Is it possible to encode a 1.50 mpg to a ±700mb .avi file ?
i have 2cd mpg versions (wich i encoded, they were previously .avi). I dont have the original .avi files anymore, and i need to put it on 1cd if possible with not a lot of quallity loss. any1 that has any idea how i do this ?

thx

cya