AVI was first introduced by Microsoft in 1992 it has not seen updates since that time and as a consequence is an old format, yet it is useful as a uncompressed audio/video container, thus it's large footprint.
The latest AVI is known as AVI 2.0 but still came out way before our modern digital cameras and editing software.
DVI-AVI types 1 & 2 are containers that are compressed but have a variable encoding methods
PD10 is true to AVI as originally created by MS and is doing exactly what it should in encoding and decoding, if you want smaller files you need to choose a diferent format but AVI will always been known as a 'lossless' codec.
Windows 7 X64 SP1
ASUS P6X58D Premium LGA1366 X58
Intel core I7 950 3.80 GHZ CPU
12Gb Corsair TR3X3G1600C8D Tri channel
Corsair H70 Water cooling
Corsair HX1000W PSU
nVidia GTX 980
Intel 240Gb SSD 520 Series
2 x Seagate 1 Tb