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Sorry I missed the message you left me earlier in the month. I just noticed it there right now. Anyway, as for avi files on the PSP the only thing I can tell you is that I got the Gameshark Media Manager and I've only used that for any pics or video files that I put onto my PSP. The thing was only 15 bucks and it worked great so I didn't bother trying anything else.
Glass does the psp run avi files without modding it?