Well... I got it to work!!! I didn't use VirtualDub however. Someone in the Replay forums pointed me to a program called Dr. Divx. It's only a beta version and is currently a 15 day trial. Well after downloading and installing I converted a 1/2 TV show to .avi. I modified the setting to 320x240 and adjusted the audio to mono. The file turned out to be around 63 meg (down from the original Replay size of 425 meg). I loaded it onto my Axim and used PocketMVP to watch. I haven't watch the whole thing yet, but did jump around within the program and it works great. Mapped some of the buttons in PocketMVP to adjust the brightness, the volume, etc. It's great!!! Hope they have the full version of Dr. Divx available soon!!!
Well, that's the way I got it to work. Don't know if anyone else is trying this, but it does work that way.
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