All the files on Youtube are .flv files so you could convert to those

There is a handy program called Super which converts between most formats and is free which you can find here. It works on a one-click basis.

If you haven't come across another freebie called VirtualDub it's also easy to use and useful - it's features are described here.

I would think that your idea of recording your video to DVD sounds practical ut oters may be able to suggest other ways as I know little about video.