I recently bought a Microsoft Zune which I am very pleased with. It allows me to watch movies and listen to music on boring train journeys.
However, I have lots of AVI files from years ago that I'd like to watch on the Zune. But the Zune doesn't support AVI files so a converter is required. Windows Media Encoder is great for this. You can download Windows Media Encoder free from here: http://www.microsoft.com/downloads/details.aspx?FamilyID=5691ba02-e496-465a-bba9-b2f1182cdf24&displaylang=en
If you have an Xbox 360, you can plug your Zune into the Xbox via USB and watch the movies or listen to music thorugh your TV.