While the following guides are made for a video DVD as source, you can do the same routine with one .avi file or several. One has just to use the OPEN FILES ... option inseatd of the OPEN DVD... option, if that is understandable.
I have the problem with MPEG Streamclip that I oftentimes don't get the audio from an AVI file.
I use Flip4Mac as a Compressor plugin. Has solved the problem.
Jack, if you don't wanna spend 100+ dollars for Flip/Compressor, there's a multitude of transcoders on the web. They mostly cost around thirty to forty bucks. Google for AVI to Mac.
But still download MPEG Streamclip. It's an absolutely versatile tool. Don't foget to install Perian before.