@Quaxo it's all good, so now, we have to see what happens when the original poster tries out the latest suggestions and klite codec pack already comes with codecs able to play avi files regardless of whether it's encoded via xvid or divx.
@ Gean Freaks ... hope you get WMP to work, again might give klite codec pack a try and also why version 10, when version 11 comes default on vista already?