Where did the file come from? Did you create it yourself or download it?
I'm guessing it's a DivX or Xvid encoded AVI, which tend to give DVDA and Vegas fits sometimes. If so, you should try converting it to a regular AVI or, better yet, an MPEG2 file. Can you open the file in Vegas (probably not).
You can try uncompressing the .avi file with a program like VirtualDub. This will make it universally readable but requires oodles of disk space. The audio is another issue. You may be able to use Sound Forge but I doubt it. There is a utility called Decompress in the GordianKnot Rip-pack that will decompress .avi audio to PCM which may help.