divx supports MPEG-4 compression.. something better compressed and advanced than MPEG-2
anyway the painful expericence
2 borowed hard disk one 60GB and other 80GB and about 100GB of storage already available on my PC, why i need soo much storage was that i wanted to capture raw AVI from the dv, merge and edit it in ulead media studio and then again export it as raw AVI, bcuz the ulead media studio cant utilize DivX encoder efficiently.
well anyway my final output is 2 files 700MB each which i can easily burn on 2 CD's
the video became sharp and motion was realistic when i enabled the quarter pixel in divx and changed the key frame thresold to 80%
infact the encoded video appears more sharp and realistic than the raw AVI..
im happy 
ohh yeah MPG - 2 solved my problem earlier but massive size of MPEG-2
it was taking 2 DVD's