Both apps only run when needed.
avisynth is probably one of the most powerful video editors on the face of the planeti, it is used via a scripting language, batchDPG does the hard work though so you do not have to learn it (if you want to though the documentation it comes bundled with is fantastic).
Just download and install:
http://avisynth.org/
FFDshow is an app that can decode most video as well if not better than the original codecs, equally you just install it.
Now FFDshow was originally developed by a person called Milan Cutka but he since vanished, the reason I mention this is because a search will drag up that old version.
The two replacements/continuations as I see it are CCCP which are gradually updating the libraries and providing fixes and FFDShow-tryouts which take bigger steps. Which is better I will leave for another day:
CCCP (a fantastic pack that is set up extremely well)
http://www.cccp-project.net/
FFDShow tryouts:
http://sourceforge.net/projects/ffdshow-tryout/
As an aside when you run a video or visit the folder on the start menu you will see a white FF with black writing underneath, this is your video decoder (the one with blue is audio), in these you can set it to decode the more exotic standards (which increases the range of video you can fire into batchDPG).
Might I also point out my builds of BatchDPG, they remove the need for .net, add more stability (rather than depending on some fairly buggy apps) and DPG3 support (not that you really want to use it at this stage).
http://gbatemp.net/index.php?showtopic=46763&hl=
With regard to your edit, there will be a bunch of temp files generated
one with the extension .head, this is your header
a .mp2 file (possibly a .ogg file), this is your audio
a .m1v , this is the video stream (MPEG1 if you were wondering), there may also be another file or two if you use multiple passes.
.off , what BatchDPG uses to generate the GOP
.gop , this is the list of GOPs (group of pictures) in the format DPG needs it.
.avs , this is the avisynth script