The response to this problem I got from a Toast 10 forum administrator:
"I just got word back. We don't supply the codecs to correct this issue for .avi files and really can't recommend anything to fix as I'm not sure how well it would work for you, your computer, or our software.
I wish I had a better answer for you!"
At least someone took the time to answer my question.
As for asking Vivitar, just sent them an email though I hold little (no) hope for a positive answer.
And no, it won't play in QuickTime, QuickTime Pro, Real Player, etc. To be honest, every time I've had to deal with AVI files I've had problems.