What is the difference between Windows AVI and DV-AVI formats?

For video editing purposes in PowerDirector, producing a file in DV-AVI will allow you to write back this file to your DV camcorder.

A basic AVI file (or Windows AVI) usually consists of one video stream and one audio stream. On the other hand, native DV format (as stored on your DV camcorder) will interleave audio and video into a single stream.

Generally, Windows AVI files are larger in size than DV-AVI files, because they are stored in raw format, without compression. Quality-wise, it is difficult to say which is better.