K3B can make Video CDs. So can Devede. Both are in the repositories.

Sorry I didn't make my question clearer,I don't want to make a VCD,I
just want to reduce the size of the avi[DIVX] files to 700mb or less so I
can burn them as a DATA CD. as this format wlll play on a DIVX player.I
already have K3B and DEVEDE installed.

I always burn as much as I can onto a DVD, is that an option for you? That
way having to shoehorn a film into 700 MB isn't an issue. I can play them on
both my Philips avi/DivX boxes.

At the same time I hope someone can suggest an avi shrinking app as it would
come in handy for downsizing those 1.5 GB movies!

I am unsure whether a Data DVD[in my case DVD-RW] will
actually play in my Toshiba unit,but I agree that it would be helpful if
there was a linux version of autoGK or some other similar linux compatable
programme..

Ubuntu uses encoders that can be run from the commandline. Depending on what
you want you can use mencoder or avidemux. Mencoder is the backend for many
video players such as Mplayer or Kplayer. You can edit videos and re-encode
them or even change formats using VLC or the two players mentioned
previously. You can change the file size by re-encoding it. If you are
ripping DVDs then you can use Handbrake (I think that it only makes MKV and
MP4), DVD:RIP, OGMRIP or Acidrip. K9copy will also rip, but not transcode.

The succinct answer is that there seems to be no one GUI tool to do
precisely what you want. In the past people just used the commandline tools
because they were faster for most people and in recent years AVIs are not
that common and CDs are disappearing, too. Now many DVD players will read
avi/DiVX video files and media streaming devices do not care about file size
as long as they fit on a usb key or external drive. The need to fit on a CD
seems to be fading, as most distributions are switching to DVDs because they
are cheaper than CDs.

If there is something that you are familiar with from Windows then you can
try to run it in Wine.