I agree with Warbitrary: direct conversion to DVD is best.
Why? The movies you've downloaded via torrent are likely converted from the original DVD (or camcorder recording) using a process called transcoding. This sacrifices a little bit of detail in order to reduce the file size significantly. Any additional video transcoding, from whatever format to your desired .avi, can only lose more detail-- and trust me, you'll notice it on your big-screen TV, especially during dark scenes (big, pixellated splotches in deep shadows) or during high-motion scenes.
Look carefully into Toast's capabilities, and make sure it can convert your various formats directly onto DVD to minimize further transcoding. Once original detail is lost, it's lost forever.
Oh, and do be careful with your torrenting. BitTorrent is not an anonymous protocol. If you attract enough attention with your downloads, you WILL eventually be found out. Consider other methods of getting your movies, including glitch44's suggestion of purchasing.