that means a read error surely, copy it elsewhere, make sure windows isn't pissing around with it. You know what its like with trying to read avis when it shouldn't (ie 99% cpu bug, can not cut and paste, etc.).
Sounds more like that avi clip has an incomplete header and XP is hogging it in another process.
It should be able to read anything you have the correct codecs installed for. I wouldn't recommend putting in a 700mb file though readable or not
