VLC has in-built codecs & divX also plays avi files. For links see:
VLC media player - Overview (choose nearest mirror site) OR
Class not registered/Codecs - Gnutella Forums
To make an application default for particular type of file, select it (outside of LW), go to menu File>Properties>Change Open with ... & choose the program (eg: VLC) & choose always open with. Press OK, Apply & OK.
In the example below my system thought all my video files were WinAmp. Doh!