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First, if you're still using PocketDivx - you seriously need to upgrade - it's called PocketMVP now and has been for several versions.
Second, and I may be wrong but I work with a lot of video, but I have never seen any streaming .avi videos. I don't think the AVI format even supports streaming. Typically, you can't even preview an incoming .avi until you have the whole file downloaded, unlike any MPEG-based audio/video.
WMV (and it's older ASF counterpart) were always intended for streaming, which is why they work fine.
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