To play it on a DVD player, you'll have to spend time converting it to something the player can play. A standard DVD-Video would be my suggestion.
MOV and AVI are just wrappers, not video formats. It's about on par with going to a restaurant and ordering "a glass of liquid and a plate of food". It's very generic. MOV and AVI files can hold many formats of video, be it H.264, Divx, Xvid, HuffYUV, YUY2 uncompressed, etc. Other containers include FLV (Flash Video), MP4 (MPEG-4), and MKV (Matroska).
DVD players generally do no support AVI files. A few will accept Divx or Xvid inside of the AVI wrappers. This is most assuredly what you have. (A .divx file is still probably an AVI file, but misnamed with the wrong extension.)
Given that you have a Mac, this may be more complicated than you're wanting to get involved in. Macs have far fewer choices for video software compared to Windows, for most workflows. That would include a Divx/Xvid workflow. Macs are best for DV input and making DVDs, and that's about it.
The obvious choice would be the official Mac Divx software:
http://www.divx.com/en/software/mac
A few more choices would include:
I've not personally tried any of these before. I don't currently have a Mac, so I can't test them right now. I would suggest the Divx software first. Then maybe try the others.
In terms of settings, keep the video to 640x480 or smaller (512x384 is a commonly-used good size) for 4x3 content, and stick to matching your other source specs. NTSC 29.97 or 23.976, or whatever the camera makes. For 16x9 or HD resolution source, 640x360 Divx output is standard. The good news is most P&S cameras don't do interlaced recordings, so that's one less issue to worry about for Divx conversion.
Note: Divx and Xvid are two versions of the same thing. You can use either of them.
This is something I'd do on a Windows machine, using Procoder,
MainConcept or even VirtualDub. And then there's MANY freeware choices, through quality will vary between them. Xvid4PSP is a common Windows software suggestion:
http://www.videohelp.com/tools/XviD4PSP
If you have Windows on your Mac, either in Bootcamp or via virtual machine (Parallels, VMWare Fusion), then you have more choices.
I can understand the desire to travel light.
While I'd prefer to keep a Nikon D3 or D200 on me at all times, sometimes I just need to settle for a
Sony point-and-shoot pocket cam.
Hope that helps.
