"encode avi files" = you need a program called virtualdub to use this. virtualdub basically encodes various video formats (mpeg, etc) to avi depending on your preferred settings (like screen size, bit rate, etc)
"pocketmvp" = a player application for the sap used to play avis. the built-in media player in the sap only plays wmvs so you'll need pocketmvp for avis
"clinteastman's v2 settings" = a modaco user (clinteastman) messed around with virtualdub's settings and found a pretty good setting for video playback in the sap (and saved it for other sap users to use). just unzip the files somewhere and open it using virtualdub (there's an option there which says "load processing settings).
here's a step by step process in converting video files to smartphone-playable ones:
1. download virtualdub (search in google)
2. download clinteastman's v2 settings (see previous post for the link)
3. open virtualdub, load clinteastman's v2 settings (there are two actually. the normal uses fullscreen while letterbox uses about 3/4ths of it. i find letterbox to be a bit more detailed than normal.)
4. open desired avi/mpeg file
5. click "save as avi" to start encoding
6. install pocketmvp in your sap (see previous post for the link)
then copy the newly encoded video file somewhere in your storage card (pocketmvp only reads the storage card so you can't put the file in your phone memory) then open it using pocketmvp. tada!
hope this helps