why dont you just render as an mpeg first. If that works well, you can use another program to do the avi conversion. Encoding to avi is a finicky business, depending on what codecs you have and how tweakable the proggie is. I very much doubt the sony proggie is doing a nice job of a h264/xvid etc conversion... the former being the best as far as picture quality is concerned.
So, try output to good ole mpeg, make a note of framerate, resolution, audio and video bitrate and if that turned out well, I can fill you in on the next step. I literally record and encode 100s of gigs of HDTV a week. Capture is via vista media center(ie. dvrms mpeg2). Mpeg2 stripping and ad removal by video-redo(the best mpeg editor in THE UNIVERSE).
Finally, I output to h264 via the great freeware app, "any video converter". More stable than SUPER(especially for H264), quick and a GUI a monkey could navigate ! Doing this, I decrease filesizes literally by 90% !! (HDTV 1080i dvrms/mpeg2 can sometimes be 2gb per half hour !!)
For capturing stuff where a video conversion isnt possible/easy, like with some gameplay cutscenes, I use fraps. Its awesome, and can capture full rez and sound of whatever you are viewing at. Captured files are huge, but easily converted/shrunk using above process !
Asinus asinum fricat