Why can't I compress with Xvid?

[Villain]

Okay, using FRAPS I created a 3 gig avi of a Half-Life demo. So I go to VirtualDub to compress this. I selected Xvid as the compression (2pass 1st pass) and it creates an avi. I double click it? No video. Only audio. Huh? So I open that avi with Gspot and it says I have the codecs. What's up with that? I try DivX 5 something and it's not working. I tried DivX ;-) Mpeg 4 Fast Motion and it does playback in VLC and PowerDVD. Why am I having problems with XviD? If I use Xvid twopass - 2nd pass it works but the compression is crap or the quality is useless. You can hardly make anything out. I was using mostly default encoding settings. I've been uninstalling codecs left and right and reinstalling the latest Xvid, ffdshow, etc. Tried codec packs, tried using BigFix1.6b to remove everything, tried every I could think of. It's always the same. Why can't I encode with Xvid?

[mod]

So I go to VirtualDub to compress this. I selected Xvid as the compression (2pass 1st pass) and it creates an avi
The .avi file that you get after the 1st pass isn't good for playing (not with default XvD settings). The important file is the .PASS that XviD created during the 1st pass.
REOPEN the original file, and set XviD to 2nd pass, choosing as .PASS file the one created before.
Choose bitrate.
Encode.
Now you have a "correct" output avi file.