as far as video i think they only play mp4 files. I use the dvdfab platinum free trial to do mine. there is an ipod button on the left. choose the avi file and it will convert to mp4
As I know it cannot play .avi files,you can choose some converter softwares about iPod. In this forum you can find lot of resource of iPod converter Hope you can find your favorable one http://forums.afterdawn.com/thread_view.cfm/429238#2663275
I have a very reliable converter called SUPER, you guys might want to try it out. but i just wanted to make sure i wasn't wasting my time converting downloaded movies, tv shows.
Of course,iPod need mp4 file for play. You also can try winavi which can convert to your ipod directly,don't need other software,fast.
You need to convert avi to iPod mp4 format following this guide: http://forums.afterdawn.com/thread_view.cfm/253137 More ipod conversion guides: http://forums.afterdawn.com/thread_view.cfm/385738