AVI stands for Audio Video Interleave. It is a special case
of the RIFF (Resource Interchange File Format). AVI is defined by
Microsoft. AVI is the most common format for audio/video data on the
PC. AVI is an example of a de facto (by fact) standard.

Personally I would recommend VLC for playback since it has in-built codecs. But you can also get avi codecs to play in other players. See CODECs list and alternate players for Movies

Nero & Roxio burner programs have the ability to convert & burn most (but not all) avi types. And yes, avi is simply like the outer shell, what's inside can vary greatly.