Hey-I had that problem too. I downloaded Avi files and tried divx to convert, but divix wouldn't even allow me to add the avi files. I read in divix that you have to have a 500megahertz mac to access divix, and mine is only 400megahertz. A friend converted the files to mpeg for me, and they were fine, yet much larger.
ps- also found out that quicktime won't play the sound for a lot of files, and they are working on fixing that problem for macs- real player does the same thing it did to you to me, and their support team still hasn't responded to possible solutions
keep me posted with any fixes
i have the notification tab under this thread checked
cm