AVI Playback and Record in Sequencemaster. When playing or recording an AVI file, a computer requires a CODEC to interpret the video and audio information held within an AVI file.
Some CODEC's simply supply your operating system with information, others supply compression mechanisms to reduce the AVI file size.
There are numerous standard and non-standard types of CODECs available for use.
The most likely cause for the lack of display of an AVI file is a missing or faulty CODEC. Several official bodies exist to provide a standard method of providing compression techniques and quality bug free CODECs.
There are many other suppliers of CODECs and there standards of coding vary (some CODEC bug can crash your avi player or even ,in the worst case, your operating system.)

When downloading and installing CODEC's you may have to install separate playback and record CODEC's. Sequencemaster can pick up from your windows operating system any installed CODEC, however it is up to the CODEC creator to ensure that their coding is bug free and doesn't cause any playback or record problems.
Sequencemaster effectively has access to use any installed CODEC to play or record your sequence as an AVI. What you must remember is that when you playback the AVI movie, the computer that plays the AVI movie must have the appropriate CODEC to interpret your AVI file. It is recommended that official or standard CODEC's are used to ensure playback on as many systems as possible. It is also recommended that your windows operating system has the latest service packs and patches installed. The cinepak codec is one of the most widely installed (certainly on Microsoft Windows platforms) and is a good choice for the compatibility of your AVI files. However the CODEC does not offer particularly small file sizes.

Various links :-

Divx provides very good compression with high quality image playback

www.divx.com/
www.divxmovies.com/software/

www.free-codecs.com provide numerous download links including packs of the most popular CODECS and AVI to DVD and other conversion software.

the K-Lite Mega Pack can be found here and covers the majority of CODECS including Quicktime playback (MOV files), DivX, and realplayer formats

www.free-codecs.com/download/K_Lite_Mega_Codec_Pack.htm

Further information links :-

www.mpegif.org/

MPEG 4 industry forum.

www.apple.com/quicktime/technologies/mpeg4/

Apple's MPEG4 information.