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Videos come in a wide variety of formats, some of which are supported by the iPod and some of which are not. Even if you purchase a video format conversion utility, your video may not come out the way you want it!
Apple supports the following formats: most varieties of H.264 video, .mov files, MPEG 4 files, and .m4v files. If you have a .avi file, or other format - you will need a conversion utility.
One of the most common, and most easily solved problems is having the TV Out control set to on. If you have this problem, you will get audio only when you try to play movies. Set TV Out to off, and you will immediately fix this issue.
If you have other, more sophisticated problems - it is best to contact Apple technical support directly.