Sorry to bother you, I don't know whether this is a bug or not :-)
I have read through your site and the avifile site several times in an attempt to play avi and asf files, but to no avail. MPEGs work fine, though. This is what I've done. I run Mandrake 7.2, so I installed the included Xtheater-0.5.4-3mdk.i586.rpm and libaviplay-0.50-1mdk.i586.rpm (which is tailored especially for Xtheater), after making sure that all dependencies were met. I then got your binaries from your site and copied them to /usr/local/lib/Xtheater/win32/, as is outlined on your site and in the libaviplay readme.
I tried opening a number of different-sized avi and asf files that I have played successfully in Windows. However, each time I tried Xtheater would pop up a window saying "Loader unable to locate a working plugin for..." Just in case, I tried setting the dll files as executable, but this did not work either.
Is there anything else I can try? :-)