No. It is raw, uncompressed AVI. It's the best state the master can be in , which is why it is 80 Gbs. It will have to be compressed to MPEG form to fit a DVD-9 (much less for a DVD-5).
"if yes, is it watchable? meaning does it require any color correction or anything like that"
It will need color correcting, but not much.
"going from an 80gig file to a 8.5 gig dvd isnt that gonna require alot of compression, thereby reducing the quality significantly? Would anything else be done with prior to putting it on a dvd"
Uhm, this is how all DVDs are made. Regardless of the quality of the master, the final product still has to fit on a DVD - unless you want it on two or more, a la Lord of the Rings or Das Boot.
"sorry for any of the real newbie-ish questions"
No problems...keep askin'
"but its a SATA version don't know if thats any good for you?"
Ooh, that's a good question. You might want to look for an extra controller just in case (I have to use PCI controllers in both computers, because the onboard bios won't go beyond 137 GBs. My second controller includes SATA along with the ATA.)