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but the FFMMS2.avsi is looking for ffindex.exe?
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It is looking for ffms2.dll
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AVISource: couldn't locate a decompressor for fourcc mjpg
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Ah, well that says that you need an M-JPEG VfW codec. I don't know of any free ones, unfortunately, but the commercial ones fro Morgan and PICVideo are fairly popular, however.
You could also try opening the AVI files directly in VirtualDub (which has built-in MJPEG support) and then converting them to another codec, like Lagarith or Ut Lossless.
** EDIT **
I just remembered: You can use the Matrox MJPEG codec for free. The only pisser is that it installs several other codecs; the problem being that it installs Matrox's DV codec, which will take priority over whichever DV codec you have installed. You can change this in the Registry, of course, but the easiest way is to reinstall whatever DV codec you like (such as Cedocida) after installing the Matrox codecs.
http://www.matrox.com/video/en/support/windows/vfw_software_codecs/downloads/softwares/version1.0/