Yeah I don't see the problem with .avi, but search google for an avi converter like grickey said or download a P2P program and download one from there.
converting avi files to mpeg files takes a long time. if you want to burn a movie file out of your avi file, a nero burner can do it for you. nero will automatically convert that into an mpeg.....you have to wait coz its takes a couple of minutes depending on file size.