"By default the Zune software will not accept or transcode DiVX, XViD, and MPEG files with .AVI extensions. Zune Scene forum members have developed a couple ways to circumvent the problem, the simplest is a registry hack that will allow the videos to be added to the Zune software:"
A member of Zunescene.com has discovered a way to modify the registry and upload DivX files to your Zune. The Zune does not actually play the DivX files, but next time you sync they will be converted to WMV.
View more details @ zunescene.com