the audio is either compressed or is ac3. First get VirtualDUB and try this.. 1. open the avi in it 2. click video - direct stream copy 3. click audio - full processing mode 4. click audio - compression, select no compress pcm and click ok 5. click save as avi. Now try and encode it If you get any errors with the audio then it is probably ac3 so if you do then tell me and ill let ya know what to do!
for an ac3 decoder... http://www.mediatwins.com/products/ac3_decoder.htm it allows xvid to be played in Media Player 9 ...
Or the ac3 filter - http://www.afterdawn.com/software/video_software/codecs_and_filters/ac3filter.cfm
That should be perfect, try clearing tmpgenc off your system completely and then put it back on (or install if you get the instal version!)