Hi, I know how to make avi’s play in iTunes, but what I would really like -before I purchase atv flash- is to use iTunes to sync my divx, avi’s, etc. to the ATV using iTunes so I can have all movies in just one folder. I just don’t like the idea of having to use an FTP client for a separate class of movies and then having to differentiate between “apple’s legit movies” and “divx and other format movies”.
There is a script called Appletvfooler http://wiki.awkwardtv.org/wiki/How_to_get_iTunes_to_sync_other_video_formats_to_Apple_TV that puts a container around avi files so that they sync with iTunes - it doesn’t re-encode the file.
I use it with all my media so that they can be sorted and kept organised by iTunes allowing seamless playback through either of our AppleTV’s or other devices. I go a step further and do not import all the media into iTunes, I keep the files where I chose to store them and then just create an alias of the file in the iTunes library.
Since I started down this path I seldom use Nito or ATV now as everything plays utilising the iTunes eco system - all you need to ensure is that Perian is installed.