I have the same problem when trying to compile 5 AVI files into a DVD, whether I burn them directly to a DVD or save an image file. These files are around 200M each. I read almost all of the threads here on this error, and followed the suggested way to update my graphic card driver, update latest DirectX, but the error persists. After trying for 2 days, I finally realized what's the problem. The AVI files carry names in Chinese characters. After I change them to English, convert & copy works. For those folks with similar error, this is another area you may want to look at.

Allan, thanks for the info and the good detective work! I think I do remember this coming up a long while back but I'm certain it's not something most would even think of. Thanks.