Its the XviD codec... I had to convert my XviD copy of south park to DivX to make it play right. Also in the manual it states it can play AC3/MP3 encoded audio in the video file.

Mr. Ceddy, I downloaded a scene release (group was LOL i think) episode of Lost, 24, and Heroes onto a dvd-r off bittorrent, it was an xvid ac5.1 hdtv rip. Did NOT play in the d3, which was a little disappointing. Unit sees the files on the drive but errors out when you try to play them.

 

I believe this is the confirmation you needed.

Are you sure it didnt play because of the 5.1 AC3 audio? Xvid and Divx are both essentially MPEG-4, it has nothing to do with what companies make which. I'm getting my D3 today, I'll do a lot of testing then.

xvid and dvix are different codecs (yes it does matter). You would need to convert them in order to play it.

DivX and Xvid is totally different codec, although they are both AVI, if u play video conversion long enough, you'll notice DivX provides better quality with moderate file size, whereas Xvid are highly compressed, not as good quality, but every small file size