glms,
with respect, the problem was solved with the software I mentioned, but as it isn't free, it was dismissed by those in this thread. It supports custom size, framerate, rotation, bitrate, and yes, mp2.
Point is, there are tons of applications that can create a properly formatted .avi file. Just most of them the author would like to see some money for their work. Kind of like most of us, I suspect ;-)
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My two iPods are jealous of my two MPx players.
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