I've the same issue !!I'm on 0.9.1 and I get this message when I try to play an XVID file:
No suitable decoder module:
VLC does not support the audio or video format "XVID". Unfortunately there is no way for you to fix this.
P.S. Using openSuSE 11.0, 2.6.27-rc4, KDE 3.5.10, QT 4.4...