Windows 32 Binary:
Right now, if you transcode an mpeg TS or program stream to DiviX or Mp4 and use the Avi file format as a container, the resulting files will play OK on VLC, but will not play on any of the other players. At least in the windows world, the DiviX and Mp4 codecs are not usually encoded with an Mp4 file extension.
I've also tried transcoding mpeg streams to the Mp4 file extension. It plays back fine with VLC, but will not play back with Nero, the only other mp4 compatible software player I have.
I'd like to see these issues fixed in a future version of VLC. Great app - gets better with every release!