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Yup, the latest xvid codec doesn't work, but the one that I mentioned (04102002 koepi) works a treat.
With the latest version of PocketMVP with the latest beta divx decoder "upgrade" the latest version of xvid MAY work, but I don't know, I haven't fully tried it yet. It should work from what I hear, and it does work with b-frame encoding which apparently allows better quality with lower bit rates... I've not played with any of that though, and I'm happy with my current setup so I'm loathed to mess with it... my desire to play will no doubt overwhelm that at some point before too long though :)
mark
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