What is the source of this AVI and which codec does it use? Codecs make all the difference -- and AVIs can be made up of any of thousands of them!
If you don't know the codec, open the video in a program like G Spot or Media Info and check out the resolution, frame rate and above all audio and video codecs.
Codecs like MJPEG (which are the most common way still cameras save AVIs), Divx and Xvid are particularly problematic for most video editors.