a VCD (.dat) file is an mpeg, so you will have to convert to it first
try AVI2MPG or DVMpeg v5.
you can get the first one (dos based prog) from www.divx-digest.com.
You could strip the audio off the avi using virtualdub and then use xing encoder to mux the video and audio to an mpeg.
If its out of sync after muxing it, take note how long and increase or decrease the audio file size, re-mux til your happy