converting video and audio files

recently bought an external CD burner for my Sony VIO notebook PC. OS is 98se, 256ram, 4gig hard drive. My hard drive is starting to fill up due to my downloading digital camera video to it. Software that came with CD burner would not acccept the .AVI file extension which my camera software, only MPG for video and JPEG for still shots. Nothing in help menu about how to convet files. Help. Thanks