tidal - I experienced similar troubles and frustrations when first starting with vdub. For the life of me, I can't remember what I did to correct it. (too much info too soon? or just old tired brain cells) I read many web pages on vdub and divx. Nicky's guides are very good.
Can you load (not play) your attempts on the Axim and get file info? (File - Media Info) I used this to see what the settings of the "good" clips were and kept tweaking till I got mine to work. Also, I lowered size slightly (less than 320x240). Divx 5 seems to handle uncommon sizes better.
Nicky's pages
HTH,
Jeff