Winnydows has again updated his Video Converter for the PSP which is great for Xvid converting:

Heres whats new:

4.015 changes:
Added two AVI decoders more. OpenDMLSource & AVIFileSource. OpenDMLSource support import AVIs size > 2GB.
Very funny, but now MP4 PSP output fixed! Sure! Was missing ATOMChanger.ini in full release.
Added block from 48000khz selection for PMP output.

Download Here