I tested vlc-0.8.6c on i386 with Gutsy and the following video played fine:
http://people.ee.ethz.ch/~fhoesli/video/Feature-Test-Xvid.2BVOP-GMC.('Perfect-Day').avi
** Changed in: vlc (Ubuntu)
Importance: Undecided => Low
Status: New => Fix Released
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vlc cannot play xvid movies
https://bugs.launchpad.net/bugs/76792
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