I'm not sure about Nero ... it's probably the same, but I do remember with Roxio that it has limitations with mpeg files. You cannot do something with them that you can with avi files. I just can't remember what that is. It might be you can't edit the sections you want to burn with mpeg ... You can only use the total that's there. Perhaps I'm wrong but I do know avi has some flexibility that mpeg doesn't but only in the preparation stage of the Roxio setting up before burning.

Not forgetting DVD actually uses mpeg 2 format but is Muxed during the conversion stage if the original file is mpeg2 with separations & info files created.