The more "sound" in an AHF file, the larger it gets. Not to mention it's not the best quality of sound to begin with.
You go putting a solid soundtrack through a vox record inside the film viewer, and your filesize will grow rapidly. On top of that you can't capture camera angles, external shots, and other things that normal editing provide, with the simple interface of the film viewer.
The end result just isn't worth it. Use FRAPs, capture the stuff you want, edit together, and put your soundtrack into that edited version.
AVI is a broad category. In general it's not as well compressed as more recent formats, but inside AVI you can choose a number of CODECs.
WMV9 is pretty decent. DivX and XviD are better (but more proprietary). MPEG1 is good, MPEG2 better, MPEG4 may be the best. These are all a mere fraction of the average generic AVI file.