The only *free* way to do it is by using something based on mencoder. I know in darwinports, a working variant exists, but from what I remember ffmpegX can also do it if you install the reallibs. Those reallibs are what enable the conversion, and they have to be where mencoder expects them to be.
mencoder is best to converting into avi:
Code:
mencoder -oac mp3lame -lameopts vbr=0:br=96 -ovc lavc -lavcopts vbitrate=900 -ffourcc xvid /path/REALmedia.rm -o /path/OUTPUT.avi
...although that command may rely on mencoder being built against an installed lame - I forget what variants I built it with (could have been all of them).