doom,
Try installing a codec pack. You can download them from our [Downloads] --> [Codecs] section on our site.
The AMV Convert Tool will need them to convert compressed .avi files.
Have a look at some of these posts as well where people are having similar problems as you are:
http://www.mympxplayer.org/can-not-c...-amv-vt76.html
http://www.mympxplayer.org/how-to-co...-4-vt2411.html
http://www.mympxplayer.org/allow-rea...mv-vt1505.html
Try that and let us know of the outcome.