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No problem,
BetaPlayer will play just about any media format - get it!! It is changing it's name soon though to TCPMP.
If you want to compress AVI such that it is smaller (say to DivX or Xvid) then you can use PocketDivXEncoder. If you want to rip DVDs or something you can use Fairuse (seems popular here) or DVDx (which I use - was more powerful, but not as easy as Fairuse when I last looked). All software is free just google it and it will come up.
Enjoy
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