Personally I find a dvd burner extremely useful, since i Have a lot of images and important documents that I want to archive and if I did it with a CD burner it would take about 6-7 cds
DVD burners for a desktop is definitely a lot more mature than what you can find on a laptop. I think you pay a slight premium for dvd burners for laptops. In my case, I probably wouldn't pay the premium and get an internal dvd burner, since I already have a desktop with an inbuilt faster dvd burner
If I really need to burn large files from my current laptop, I just transfer it to a PSD device (holds 20Gb) and then transfer to my desktop to burn to dvd there
You could always make do with a CD-RW and purchase an external burner and use it for the laptop that way
But if you don't have a desktop and want to transfer VHS tapes, then you're probably better getting hold of a laptop with DVD Burner option, since most of the AVI files you transfer across once encoded to Mpeg will probably be much larger than can fit on a regular CD
I transfer home movies from my Camcorder all the time (which you can do from VHS to Camcorder) to my desktop, edit them, encode them and burn to DVD. Invariably they're always much larger than 700Mb, so a DVD burner is a necessity unless you sacrifice quality
I am getting ready to purchase a new laptop and think I have worked out most issues except the choice of optical drive. I assumed I wanted a DVD burner, mostly for storage, but now I'm not so sure. I got a CD burner when they were fairly new and have ALWAYS had trouble with it. Are DVD burners still too new? I would like to have that large capacity and would also like to transfer old VHS tapes to DVD. I would be willing to wait, however, it the drives are quirky and unreliable.

Chowhound
Comic Vine
GameFAQs
GameSpot
Giant Bomb
TechRepublic