Nevisranger has provided this solution - I have not tried it yet.

hey mate,,i just had same prob, i was encoding and burning with nero,and final vcd turned out upside down,,i tried here but no one could help,,so,i tried fixing myself,,,and did it,
1st i opened up virtualdub, when open ,,in video tab , click on Direct Stream Copy, make sure audio says same as well as avi audio,next , go to file , and open video file u wanna encode and burn, go to file again , and hit Save as Avi,, if saving in folder as original avi file ,,rename it (ie.spiderman,,,,spiderman vd) u know what i mean,,now u can delete original avi and keep new one,,then open nero and make vcd,,,mine worked no prob. please share with others,as i noticed alot of people out there with same prob,,and no one could help, i just joined so i have to wait 3 days before i can post...bye