Analyse the .avi file with VideoSpec (I prefer that, though it hasn't been updated since 11/2009), MediaInfo Mac (10/2010) or MediaInfo (10/2010, there is a Mac OS X version to download, VideoSpec and MediaInfo Mac are using the same library as MediaInfo) and report back.
What about playing .avi files via Movist or VLC Player?
Movist uses the QuickTime frameworks [and FFmpeg]. So, yes, you are using the part of QuickTime that matters. I agree with the recommendation to install DivX. I also strongly recommend that he install the Perian and Flip4Mac codecs.