LMP I just found out that according to the dev team, this will be the last version of Handbrake that will support AVI and XviD (http://forum.handbrake.fr/viewtopic.php?f=6&t=12464).
I find this very disappointing, because my main use for Handbrake was to create backups of my DVDs in XviD/AVI files which were compatible with my DVD player. Without further development on this front, Handbrake will become useless to me, and I will have to look for a more clunky and/or commercial solution, like FFmpegX.
If you also feel that there should be some support for XviD/AVI in future versions of Handbrake, I suggest you contact the dev team, or post your comments here.
(Version 0.9.3)