Even if you were to feed DVDA an AVI file, it still has to be encoded as an MPEG-2 stream for DVD creation.
A lot of us prefer to feed it an already rendered file.
In your case, for a 2 hr. video, the bitrate calculator I use says a CBR of 4,700,000 or a VBR of 8,000,000, 4,700,000, 2,800,000.
Keep in mind what Gary said about DVDA reporting things wrongly. This has been a complaint since it was introduced 🙁
If I know that my MPEG-2/AC-3 streams are under the allowable limit, I just ignore the warning.