Side topic: unrar.exe is a free program, it’s at the same palce you get WinRar ... it’s command line (no pretty GUI), but it is free and will uncompress all your Rar files (all those *.rar/*.001/*.r01 etcetera files). I usually just make a batch file (just like a text file, but with a *.bat ending, WinDoze people will most likely have to have “show extensions” swtiched to 'on' to change the file type), and then just change the source and destination as I uncompress new files, saving and using the same batch file. Just a two cents with regard to a free way to deal with Rar files.
XBox ... a 100% legal XBox, no modding, no opening the box, no making M$ unhappy (basically what we all have right? No one would do something illegal, but hypothetically speaking ...) right out of the box the system will play DVD movies (but this requires the dongle and remote), but no other files to my knowledge. Still in hypothetical mode, XBMC is a dashboard (very similar to an Operating System, although it’s only the front end, but does offer increased functioanlity) that repalces the big green XBox one and supports a whole slew of files types, and you don’t need the remote and dongle to make them work ... although it is nice to put that wire away from time to time, hence you might want one. In short you can’t play any *.avi files on a straight from manufacturer XBox, heck you can’t even get them onto your XBox to try ... well maybe a softmod through the Mechwarrior Campaign backdoor, but I’ve never tried that, hypothetical or otherwise.
Check out http://www.videohelp.com/forum/viewtopic.php?t=231192
or simply search in google “rmvb to avi guide” as I did and find a guide that works for you. The short answer is that it can be done. Mate of mine has been dealing with this format in a download she did, it’s the only reason I seek out an answer at all, in other words I haven’t done it before, but I hope I can help in finding an answer that works for you.
Kindest from Canada