you can't import an avi or any other file except the apple formats into itunes.
you need to install perian and then create a reference file to the actual video using quicktime pro. the reference file will be a few kilobytes, and you can import that into itunes. when itunes plays the file, the reference file tells it where the avi file is and starts playing it. a bit convoluted but works well, especially if you want to use frontrow + itunes instead of just frontrow + movies folder.
you need to install perian and then create a reference file to the actual video using quicktime pro. the reference file will be a few kilobytes, and you can import that into itunes. when itunes plays the file, the reference file tells it where the avi file is and starts playing it. a bit convoluted but works well, especially if you want to use frontrow + itunes instead of just frontrow + movies folder.