divx, xvid etc all have the .avi extension though. So don't be fooled. I am not sure what type of files you are wishing to play, but if it's anything you've downloaded from the web it won't be native avi. It would be a compressed codec like divx or xvid.
If you are wanting a way of viewing these formats, best option is to get a cheap dvd player that supports divx, xvid etc, and simply burn the files to DVD. You can fit tonnes of divx and xvid on a single dvd. Well a single layer DVD can hold 4.7GB and a 40 minute long xvid is usually around 350mb, to give you can idea of capacity.
Alternatively you could get a HDD media player,
http://www.maplin.co.uk/Module.aspx?...urce=1&DOY=5m4 like that for example. However if you were looking for a new DVD player as well, that obviously means getting the DVD player separately. I certainly don't know of any DVD players with USB input. I would imagine this would be hard to do, as the DVD player would need to be able to mount the drive to read.