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Your avi has to be Uncompressed, meaning that it can"t be made with a Codec..The problem with Uncompressed AVI is that it is about 1gb per minute of Video so for a Whole movie you need at least a 100gb hard drive to Capture the avi file..and yes the CCE audio encode isn"t the greatest..I use "Headac3he" to encode the audio to Mp2 audio...