Seems that your HTiB supports WMV and MPEG4 video codecs so you will have to convert the files to either of those. Freemake Video Converter might work for you
Actually it plays AVI video files. But I noticed that avi files come in different video codecs and I also noticed that the video codec my dvd plays is the xvid ISO MPEG4. Now I'm wondering how to convert the videos on my external hard drive to this codec. Is there a software that I can download and use? freemake doesn't help me. It doesn't convert the codec. I think it converts the video format only, like MPEG, AVI, MP4, and other formats. I need to convert the video codec.