Nero 6 to make VCD

[sir nerdalot]

Ok, heres the thing: I have a '.avi' file and I want to make a VCD using Nero 6 to make it play on a DVD player.
I clicked VCD on Nero and I'm in the compilation window. There are several directories here:

CDI
EXT
MPEGAV
SEGMENT
VCD

Where should I put the avi file to make it work correctly? Do I need to convert it or something?

Thanks in advance.