Any type of video file can be saved on the unit from your PC and played back on a TV hooked to the ScreenPlay over the included A/V cable. There's no need to convert .AVI files to DVD or VCD. I moved only about 8 GB worth of video to the ScreenPlay for testing (an entire season of the darkly funny The Venture Brothers, a spoof of the old Johnny Quest cartoons), but you can transfer up to 90 hours of video to the ScreenPlay. Good news for anyone going on an extended vacation.
Iomega ScreenPlay Multimedia
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The video files are arranged according to file name and the device has a thumbnail control. Unfortunately, the thumbnail system attempts to load and play each video in its entirety as the files are listed, so getting a full directory can take some time. But video playback overall is good. I put many .AVI files of differing codec types through the ScreenPlay and had only a single hitch: When I started one video file, then pressed stop, then started from the menu again, the file's audio was corrupted. I had to turn the ScreenPlay off and on again with the switch at the back to fix the problem.
Another concern: When the ScreenPlay is put through its paces in video-playback mode, the unit becomes hot. Very hot. Heat is not unexpected in a purpose-built embedded media device coupled to a high-RPM hard drive, but I was troubled by the extent of the temperature issue. The unit lacks a cooling mechanism and has only short "feet" to give a bit of clearance and airflow underneath.